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Challenge to Florida’s vertical integration marijuana law to get second Supreme Court hearing

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(The Center Square) – The Florida Supreme Court has ordered parties engaged in a lawsuit over the 2016 constitutional amendment legalizing medical marijuana to present a second round of arguments focused on an issue not deliberated in a May hearing.

Tampa-based Florigrown filed a lawsuit two years ago challenging the Legislature’s embattled 2017 vertical integration law, which regulates the state’s growing medical marijuana industry. Two lower courts have declared the law unconstitutional.

The state appealed the rulings to the Supreme Court, and its challenge was heard before the bench May 6. The Supreme Court, however, ordered Tuesday another hearing to determine whether the 2017 legislation is a “special” law designed to benefit specific entities.

The outcome of the hearing, scheduled for Oct. 7, dramatically could overhaul how the state regulates an emerging industry that some analysts project could evolve into a $1.3 billion market in 2021 and $6 billion by 2030 in Florida.

The Florida Department of Health (DOH), which manages Florida’s medical marijuana program, is appealing a July 2019 ruling by the 1st District Court of Appeal that determined the Legislature created an oligopoly when it adopted a 2017 law requiring operators be vertically integrated.

The appellate court upheld an October 2018 ruling by Leon County Judge Charles Dodson that said the law’s cap on Medical Marijuana Treatment Centers (MMTCs) licenses at 14, and requirement that operators have the vertically integrated capacity to grow, process and distribute, is unconstitutional.

The Legislature adopted its law in the session after 71 percent of state voters approved a ballot measure legalizing medical marijuana in November 2016.

Dodson ruled the 2017 law conflicts with the intent of the 2016 constitutional measure and issued an injunction against the state from prohibiting operators that are not vertically integrated from applying for MMTCs.

The 1st District Court of Appeal lifted that temporary injunction in July, but agreed with Dodson’s ruling and ordered lawmakers to revise regulations.

DOH appealed to decision to the Supreme Court, insisting lawmakers were “within the scope of policy discretion afforded it by the Florida Constitution in setting requirements for licensure and initial market participation. The criteria are consistent with and fall within the broader boundaries of immunity set by the amendment.”

Shortly after May’s hearing, justices asked Florigrown and DOH attorneys to file briefs on their interpretations of special laws under the state’s constitution. Tuesday’s request for a second hearing based on those briefs is an unusual maneuver by the court.

The request would appear to favor Florigrown, which was denied an MMTC license because it was not vertically integrated. Florigrown argued the 2017 law is an unconstitutional special law that created two closed classes of businesses eligible for MMTC licenses.

“This (Supreme) Court has repeatedly held that the controlling question in evaluating whether a law is an unconstitutional special law is whether the class in the law is ‘closed,’ ” Florigrown attorneys wrote in their special law brief filed in June. “Here, the classes are so clearly closed, the Legislature might as well have named the licensees in the statute.”

DOH attorneys in their brief, filed in May, contend the 2017 law “ultimately establishes a comprehensive and unified statutory system for the statewide licensure and regulation” of MMTCs.

“(The) statute did not create a closed universe of licensed MMTCs,” DOH attorneys argued. “The MMTC licensure statute, viewed properly as a comprehensive and unified whole, does not provide a benefit to private corporations that others – like Florigrown – do not or cannot also receive.”

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