Challenge Looms Over Medical Pot Applications
Even before selecting five nurseries to become Florida's first legal pot producers, Department of Health officials will face a challenge from at least one grower whose application was tossed out because it was late.
The department's Office of Compassionate Use staff rejected two of the 30 applications from nurseries hoping to get chosen as one of the five coveted "dispensing organizations." Both were tossed because they were received after a 5 p.m. deadline following a frenzied scene during a torrential downpour July 8 at the agency's headquarters.
Both nurseries say their representatives were told by Department of Health workers that the 5 p.m. deadline didn't apply.
Lawyers for O.F. Nelson & Sons say they intend to challenge the rejection because the Apopka-based nursery's representatives were told that the deadline was extended for a day, in part because of the weather.
"Our application was complete, and we were prepared to submit it until the DOH expressly represented that it would extend the deadline a day. We relied on that representation, and the following day the DOH accepted our application and fee without reservation. We only recently discovered that the DOH rejected the application despite its previous assurances that we were timely," Derek Young, a lawyer with Kaplan Young & Moll Parron who represents the nursery, told The News Service of Florida on Friday.
The O.F. Nelson application was time-stamped 12 p.m. on July 9.
"Our dispensing organization is by far the most qualified and includes one of the leading medical cannabis companies in the world. Florida's patient population deserves the high standards of quality and safety our dispensing organization represents, and we therefore intend to challenge the DOH's indefensible position to ensure our patients receive exactly that," Young said.
Ed Miller and Son Nursery also received a letter from Patricia Nelson, then-director of the Office of Compassionate Use, saying that the application from the Palm City nursery --- time-stamped at 5:27 p.m. July 8 --- was "untimely." Nelson left the Office of Compassionate Use post a week ago.
The certified letters, sent July 16, also say that the nurseries have 21 days to file a challenge. Department officials referred to state law in response to questions about the rejections.
Ed Miller and Son is trying to get a license in the southeastern region of Florida. Anthony Ardizzone, a partner in the nursery, said the deadline wasn't clear and he is considering a challenge.
"We're reviewing our options," he told The News Service of Florida this week.
While the application for the dispensing organizations said that documents would be accepted "no later than 5 p.m." July 8, the Office of Compassionate Use's website says that the applications would be taken "through" 5 p.m.
Ardizzone is relying on Webster's Dictionary definition of "through," which means "during the entire period of" or "from the beginning to the end of." That means the applications should have been accepted all through the 5 o'clock hour until 6 p.m., according to Ardizzone.
Ardizzone also said that a representative who delivered his nearly 2,000-page application was told by a Department of Health worker that applications received before 5:30 "would be OK."
"The doors were open. It was accepted. It was received," Ardizzone said. "Our contention is that they took it. And they took additional information two days later."
The health department responded to requests for comment with excerpts from a rule, which says that applications would be received "no earlier than 10:00 AM, Eastern Time, on the effective date of this rule and no later than 5:00 PM, Eastern Time, 21 calendar days after the effective date of this rule." The rule went into effect on June 17.
Health Department spokeswoman Mara Burger also referred to the language in letters sent to the two nurseries citing Florida law allowing affected parties to petition for administrative hearings within 21 days of receiving the letters.
Nearly all of those seeking licenses waited until the last day to submit the applications, resulting in a frenzy at the health department's Tallahassee headquarters as the 5 p.m. deadline loomed and a downpour raged during rush-hour traffic, according to one observer.
The door to the building facing the street was locked and visitors were supposed to enter through a side door, creating more confusion as individuals toting boxes of documents scrambled to beat the clock, said Jeff Sharkey, a lobbyist who represents the Medical Marijuana Business Association of Florida, which he founded.
"You could smell the anxiety and the desperation in the air as the clock ticked towards 5 p.m.," Sharkey said. "People are coming in and handing in their applications. … One person came at 4:55 and ran up to the door and I opened the door for him. They stamped in at 4:57."
Things worsened one minute before 5 p.m., Sharkey said.
"It's raining. There's no place to park out there now. And this poor kid comes screaming up in some little car and grabs this box of stuff and runs up to the door and he's pounding on the door. And 5:00 is like a minute away," he said."His face was up against the glass. He's mouthing 'Please open the door!' He's sopping wet."
Sharkey said he opened the door for the man, who was told by a worker that he had missed the 5 p.m. deadline.
"And the poor kid just freaked out," Sharkey said.
A three-member panel, which includes the new head of the Office of Compassionate Use, has three months to choose five nurseries --- one from each region of the state --- to grow, process and distribute marijuana that is low in euphoria-inducing tetrahydrocannabinol, or THC, and high in cannabadiol, or CBD. Parents of children with a severe form of epilepsy pushed the Legislature last year to approve the low-THC cannabis, believing it can end or dramatically reduce life-threatening seizures.
Doctors were supposed to be able to begin ordering the medical marijuana for patients with severe muscle spasms or cancer on Jan. 1, but the 2014 law has been mired in challenges.
In November, Administrative Law Judge W. David Watkins rejected health officials' first attempt at a rule governing the pot industry, agreeing with Miami-based Costa Farms and others that objected to the Department of Health's proposed use of a lottery to pick the licensees.
Watkins upheld a second version of the rule in May after it, too, was challenged.
Under the current regulations, the panel will pick the five licensees based on a weighted scorecard that evaluates cultivation, processing, dispensing, financials and the operation's medical director.
Nurseries that have been doing business in Florida for at least 30 continuous years and grow a minimum of 400,000 plants at the time they apply are eligible for a license. The applications ask nurseries about their investors, pot consultants, protocols and the types of cannabis they intend to cultivate.
Applicants had 21 days to collect documents, secure the $5 million bond required in the law and submit them to state health officials, a timeline many grumbled was too hasty. Some out-of-state consultants were charging at least $150,000 to craft the applications.
Nearly everyone in the industry, including those on the sidelines, predict that, once awarded, the licenses will be challenged. From four to seven nurseries applied in each of the five regions.
In addition to the non-refundable $60,063 application fee, $5 million bond and costs to submit the license, Ardizzone estimated that it would cost $12 million to get his operation up-and-running.
The possibility that Florida voters could have another shot at legalizing full-blown medical marijuana in November 2016 makes the licenses even more appealing. The applications are a public record, except for information that is deemed "proprietary" or is exempt by Florida's broad open records laws, so losers will be able to scrutinize their competitors' winning documents.
"Everyone involved in this process has always assumed that the losers of the selection process will challenge. I think that is a given," said Louis Rotundo, a lobbyist who represents the Florida Medical Cannabis Association.