State of Florida wants new hearing in major marijuana case

Posted at 8:45 AM, Jul 25, 2019

TALLAHASSEE, Fla. — Gov. Ron DeSantis’ administration is asking an appellate court to revisit a decision that Florida officials argue injected “confusion and uncertainty” into the state’s medical marijuana industry.

RELATED: More Medical Marijuana coverage

DeSantis and health officials on Wednesday asked the 1st District Court of Appeal for a hearing by the full court, known as an “en banc” hearing, after a July 9 ruling that Florida’s “vertical integration” system requiring licensed operators to grow, process and distribute cannabis and by-products runs afoul of a constitutional amendment that broadly legalized medical marijuana.

The decision by a three-judge panel of the court “is of exceptional importance because it implicates whether the entire regulatory framework currently in place for the licensing of medical marijuana treatment centers should be overturned,” lawyers for the state argued in Wednesday’s 28-page motion.

The panel upheld in part a decision issued last year by Leon County Circuit Judge Charles Dodson, who sided with Tampa-based Florigrown in a lawsuit alleging a state law, passed during a 2017 special legislative session, did not properly carry out the 2016 constitutional amendment.

Dodson issued a temporary injunction requiring state health officials to begin registering Florigrown and other medical-marijuana firms to do business, but the judge’s order was put on hold while the state appealed. Licensed operators are known in Florida as medical marijuana treatment centers.

The panel’s “affirmance of a substantively flawed temporary injunction” by Dodson “has introduced further confusion and uncertainty into Florida’s emerging medical marijuana industry,” the state’s lawyers wrote in Wednesday’s motion.

The decision also “presents a dramatic and unprecedented shift in this court’s jurisprudence governing issuance of temporary injunctions,” which could have a significant impact on future cases, the lawyers added.

Wednesday’s widely expected motion also asked the court to refer the case to the Florida Supreme Court --- a process known as “certification of a question of great public importance” --- if the appeals court refuses to grant a rehearing.

The July 9 ruling by judges Scott Makar, James Wolf and T. Kent Wetherell --- who is now a federal judge --- gave Florida Department of Health officials “a reasonable amount of time” to begin registering medical marijuana operators.

But, even with the panel’s modifications to Dodson’s temporary injunction, the appeals court decision leaves Florida’s medical marijuana program in “a regulatory twilight zone,” the state’s lawyers argued Wednesday.

“The uncertainty surrounding the current licensing and enforcement of MMTCs (medical marijuana treatment centers) during this ‘reasonable period of time,’ coupled with the near certain litigation surrounding the (health) department’s implementation of an entirely new medical marijuana regulatory and licensing structure, will only serve to draw out the court-ordered ‘wholesale restructuring of the medical marijuana industry in Florida,’ “ the lawyers wrote.

DeSantis, who forced the Legislature to do away with a ban on smoking medical marijuana, expressed concern early this year about Florida’s vertical integration system, which requires operators to handle all aspects of the cannabis trade, including growing, processing and dispensing. If the state did not have a vertical integration system, companies could focus on individual aspects of the business.

The state’s arguments Tuesday echoed concerns expressed in a separate opinion authored by Wetherell on July 9.

The majority’s decision “will effectively mandate an immediate change in the entire structure of the medical marijuana industry in Florida,” wrote Wetherell, concurring in part and dissenting in part with the majority opinion.

But “although such a change may ultimately be warranted,” Dodson and Florigrown failed to show “how the public interest would be served by mandating this change through a preliminary injunction,” according to Wetherell.

A separate three-judge panel heard arguments last week in the Florida House’s attempt to enter the lawsuit, which could revolutionize the state’s medical marijuana market, where licenses are routinely selling for upwards of $50 million.

During the July 16 hearing, Judge Brad Thomas openly questioned Dodson’s decision.

“The (constitutional) amendment was a monumental change of the law, in allowing the distribution of a drug that is illegal under federal law, illegal under Florida law except to the extent that it’s authorized by the amendment, and a circuit judge has declared this regulatory scheme invalid. How can the House not be allowed to intervene on the merits of that determination?” Thomas asked Katherine Giddings, a lawyer representing Florigrown.

Giddings said the House waited too long to intervene in the case, and that the issue had already been settled by the three-judge panel.

“This is a situation where the legislation is so blatantly unconstitutional,” Giddings said.

But Thomas disagreed, saying the constitutionality of the law will be determined by the appeals court, not the circuit judge.

“It’s not blatantly unconstitutional until we decide whether it is or not,” Thomas said.