Another Pot Hearing Sought to Clear Up Proposed Rule

Medical Marijuana
Posted at 6:56 PM, Feb 19, 2015
and last updated 2015-02-19 14:01:45-05

TALLAHASSEE, FL. (WTXL) -  The Florida Department of Health will hold another hearing to clear up confusion about a proposed medical marijuana rule published after a marathon meeting earlier this month.

The department's Office of Compassionate Use released the latest proposal after a hand-picked panel spent 25 hours over two days hashing out the plan during a rare "negotiated rule" workshop on Feb. 4 and 5. Health officials ordered the workshop after an administrative law judge tossed their previous attempt at a rule, finding fault with the agency's plan to use a lottery to select five licensees to get the state's new medical-marijuana industry off the ground.

On Wednesday, John Dial asked the department to hold a rule workshop on the new proposal. Dial, who was not on the 12-member panel picked by Office of Compassionate Use Director Patricia Nelson and did not attend the meetings, said he requested the workshop --- which would be the fifth public meeting on the issue --- to address what he called ambiguities in the proposed regulations.

Dial said he is part of a team called "Florida Organic Products," made up of investors, a nursery that would be eligible for a license, doctors and other health care professionals, accountants and plant-tissue experts.

"There was just some ambiguous language in there that I think should be clarified before we start throwing cash at something that you don't even know what the return on investment is," Dial, a Stuart yacht broker, said.

The Legislature and Gov. Rick Scott last year approved a law that allowed limited types of medical marijuana and required the Department of Health to come up with the regulations. The law passed after heavy lobbying by parents who said certain strains of medical marijuana could help children suffering from severe forms of epilepsy.

Under the law, health officials will select five nurseries that have been in business for at least 30 continuous years in Florida and cultivate at least 400,000 plants to grow, process and distribute cannabis that is low in euphoria-inducing tetrahydrocannabinol, or THC, and high in cannabadiol, or CBD, for patients who suffer from severe spasms or cancer.

The law ordered health officials to select five "vertically-integrated" entities by Jan. 1in the hope that the low-THC product, usually delivered in paste or oil form, would be on the market by early spring. But because of the earlier legal challenges, patients likely won't be able to get the pot until this fall at the earliest.

Dial said that one of the major changes in the latest proposal floated by health officials has prompted him to put plans --- a $3 million investment --- on hold, at least for now.

That sticking point involves where the applicants will be able to grow, process and distribute their products. Under the original plan, all of the operations would have been required to take place at the same locale where a nursery is registered with the Department of Agriculture to grow the 400,000 plants that would make it eligible for a marijuana license. 

But under the latest proposal, "dispensing organizations" could cultivate the cannabis at one location, process it at another and sell the final product at one or more retail locations. 

And the pot would not have to be grown at the same place where the nursery is currently doing business, meaning that growers could apply in any of the state's five regions, although nurseries could only be awarded a single marijuana-growing license.

The guidelines in the proposed rule instruct applicants to include details about the location of all properties they propose to use to cultivate, process and dispense low-THC cannabis and the derivative product, "including ownership information for the properties and any lease terms if applicable."

For leased properties, applicants must also include documentation that the owner of the property is aware that marijuana will be grown, cultivated or dispensed there.

"They're talking about leasing properties. Does that mean if we're in the central division but I've got four warehouses that I can lease in the southeast division because it's more cost effective to do so? That's a question that I certainly would like to have clarified. The way I read that, it's very ambiguous. Does that mean we grow it on our nursery ground but we can lease a processing room someplace else because you don't have a clean room there?" Dial said in an interview with The News Service of Florida.

Dial said he and his group expected to invest at least $3 million in the project.

"I've called a halt and put everything on hold because I don't want to be one of the first five," Dial said. "Unless I get some better answers on this, I just can't roll the dice like that."

Allowing nurseries to apply outside of the regions in which they currently operate creates uncertainty for smaller or mid-size growers, said Ron Watson, a lobbyist who represents the Florida Medical Cannabis Association and other entities interested in the nascent pot industry.

"It's going to drastically change who's competing against whom in any region. We all have a main list (of eligible nurseries) but what none of us know is where their other properties are. And if I apply in all regions, it's going to cost me $300,000," Watson said. The proposed rule sets the application fee at $60,063.

Watson is working on a "glitch" bill in the Legislature to address some of the issues causing concern among potential applicants. The law allows dispensing organizations and patients, but not testing labs, to possess the plants or the final product. 

Under the proposed rule, applicants will be graded on whether they have a relationship with an independent lab "with cannabis testing and protocols." That relationship is one of myriad items, such as financial documents proving that applicants can stay in business for at least two years, evaluators will use to determine who gets one of the five licenses.

"I don't know how you're going to get around the lab issue. Each nursery has to prove they have some relationship with a lab. But the labs are not allowed to be in legal possession. And if I have to hire them as an employee, can I fire them if I don't like the test results?" Watson said.

Watson said he wasn't surprised by the request for a hearing, also anticipated by Nelson. When she published the rule on Feb. 6 in the Florida Administrative Register, Nelson set the date for a hearing, if requested, for March 2 at the Department of Health in Tallahassee.

"To me what's more intriguing is not hearing everybody get up and complain again, it's seeing what the department decides to do afterward," Watson said. "Do they make a change? Do they republish this as a final rule and then does anybody choose to challenge that?"