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Judge Rejects Cap on Marijuana Dispensaries

Bud from a Cannabis plant.
News Service of Florida
The Florida Channel
Cannabis Plant

Siding with Florida’s largest cannabis operator, a circuit judge for the second time struck down a law capping the number of dispensaries medical marijuana businesses can run. 

The limit on the number of retail storefronts was included in a 2017 law aimed at carrying out a constitutional amendment that broadly legalized medical marijuana.

But Quincy-based Trulieve challenged the provision, arguing the restriction “arbitrarily impairs product availability and safety” and “unfairly penalizes” pot providers.

Leon County Circuit Judge Karen Gievers agreed with Trulieve last month, but lawyers for the company asked her to revisit an order that also struck down the state’s “vertical integration” system requiring medical marijuana operators to handle all aspects of the cannabis trade, including growing, processing and dispensing.

Gievers’ order Friday replaces the Jan. 2 ruling, which, according to Trulieve, went “beyond the scope” of what the marijuana operator had sought.

As she has in the past, Gievers scorched the Legislature and state health officials for failing to comply with the constitutional amendment, which was approved by more than 71 percent of voters in 2016.

The 2017 law, among other things, limited the number of licenses that could be provided to so-called medical marijuana treatment centers, or MMTCs, and set an initial cap of 25 dispensaries for each operator. The cap, which gradually increases as the number of eligible patients in a statewide database increases and is now at 30, is slated to end in 2020.

“The evidence clearly and conclusively establishes beyond any doubt that conveniently located medical marijuana dispensaries (as opposed to vehicle delivery, the only allowed alternative means of dispensing) promote authorized users’ improved access to medical marijuana products and related information and services, at lower cost, and promote public safety (the stated goals for regulation in the amendment),” Gievers wrote in Friday’s ruling.

Trulieve also argued that the cap was problematic because it was imposed after the company had already opened 14 retail locations throughout the state. Trulieve --- which had 14 dispensaries before the new law went into effect and would have reached the 30-dispensary cap by the end of January --- would have chosen different locales had it known the number of storefronts would be limited, the company’s lawyers argued.

The constitutional amendment included no restrictions on the number of dispensaries, Gievers wrote in Friday’s 22-page ruling.

The statutory cap “erects barriers that needlessly increase patients’ costs, risks, and inconvenience, delay access to products, and reduce patients’ practical choice, information, privacy and safety,” the judge wrote, adding that the limit on the number of dispensaries, “even if time-limited, is the kind of regulation that the amendment was intended to eliminate.”

Gievers rejected the Department of Health’s argument that the temporary cap was designed to give state and local officials more time to consider regulations for retail medical marijuana stores.

“There is no need for more time,” she wrote, noting that the Legislature enacted the state’s first medical marijuana law in 2014.

The health department provided no evidence why state and local communities couldn’t have studied the issue and prepared laws and ordinances prior to the passage of the 2016 amendment, “or why three more years of study are needed throughout the state,” Gievers found.

“Nothing in the Constitutional (sic) allows the Legislature to delay the licensed MMTCs from opening dispensaries around the state, to allow the state to study some (undefined) issues for 3 more years or for any other reason,” she wrote.

Gievers also rejected the health department’s suggestion that limiting the number of dispensing facilities may help marijuana operators avoid failure by overexpansion, writing that “the evidence shows the contrary, with risks increased to MMTCs from the after the fact 2017 cap.”

“Handicapping existing, performing, competitive businesses to help less competitive businesses, at the expense of consumer efficiency and choice, is not rationally related to a legitimate public purpose,” the judge wrote.

Gievers ordered health officials to allow Trulieve to have a total of 34 dispensaries — its original 14 plus 30 post-2017 dispensaries — and to stop enforcing the dispensary ban, which she found “does not support voter-approved constitutional goals.”

Trulieve CEO Kim Rivers hailed the ruling, noting her company originally received a license for Florida’s Northwest region, an area that is the most rural region of the state.

“As a result, during the original application process, a cornerstone of our application was patient access and being able to dispense to patients in less populated areas. The court has sided with the argument that access to medicine is critical; Trulieve stands ready to fulfill our commitment to open dispensaries in these areas,” Rivers said in a prepared statement.

Gievers previously struck down another portion of the law, which prohibited patients from smoking medical marijuana.

Gov. Ron DeSantis has given lawmakers until March 15 — 10 days after the 2019 legislative session begins — to address the smoking ban, which the new chief of state agrees ran afoul of the Constitution. DeSantis has threatened to drop the state’s appeal of Gievers’ ruling if the Legislature fails to act.

But how the Republican governor’s administration will deal with other aspects of the state’s medical marijuana laws — which his predecessor, former Gov. Rick Scott, vigorously defended — remains a mystery.

In Friday’s ruling, Gievers, as she has in other cases, admonished the Legislature and the health agency for failing to properly implement the amendment, which she called a “game changer … with which they were obligated to comply.”

“Regrettably, they have not complied, ignoring the citizens’ clear mandate and the FACT that compliance with the constitutional medical marijuana amendment is mandatory, not merely a citizen suggestion or request,” she scolded.