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Appeals court backs ruling in case on third-party medical marijuana ordering


Justices sided with Leafly Holdings, an online site that challenged the Florida Department of Health's attempt to block medical marijuana operators from using third parties to process and dispense patient orders.

An appeals court Wednesday upheld an administrative law judge’s decision that the Florida Department of Health needed to go through a rule-making process before it could block medical marijuana operators from using third-party online sites to process patient orders.

A three-judge panel of the 1st District Court of Appeal agreed with Judge Suzanne Van Wyk that the department in 2021 improperly used an “unadopted rule” to prevent the use of the sites.

Van Wyk and the appeals court sided with Leafly Holdings Inc., an online site that challenged the department.

Wednesday’s opinion said patients could see available medical marijuana products on Leafly’s site and put them in online shopping carts. Leafly would then communicate the orders to medical marijuana operators, known as medical marijuana treatment centers, and alert patients when the orders were ready, according to the appeals court.

Patients would get their orders from medical marijuana treatment centers, which are licensed by the state.

In February 2021, the department issued a memo to medical marijuana treatment centers saying the online services violated a state law that bars the operators from contracting for services “directly related to the cultivation, processing and dispensing” of cannabis.

The appeals court Wednesday pointed to questions about interpretation of the word “dispensing” and how it applied to Leafly’s services.

“Leafly supplies an online ordering interface that displays product information and supplies order information,” said the opinion, written by Chief Judge Timothy Osterhaus and joined by Judges Ross Bilbrey and Rachel Nordby.

“If an MMTC (medical mairjuana treatment center) offers delivery services, it might communicate the shipment information through Leafly, but Leafly does not prepare or deal out the product itself. We recognize that Leafly’s relationship to the dispensing work completed by the MMTC’s might bring it within the reach of the statute. But, at the same time, the MMTCs arrangement with Leafly doesn’t make it ‘readily apparent’ that the ‘dispensing’ language of (the law) prohibits MMTCs from using online ordering services in support of their work. Rather, it appears that the department’s interpretation of ‘dispensing’ and its prescription as applied to Leafly’s business constitutes a rule.”