TALLAHASSEE — As Florida medical-marijuana companies continue to rake in cash with a growing clientele, Gov. Ron DeSantis says they need to pay more to do business in the state.
“I mean, these are very valuable licenses,” the governor said Tuesday. “I would charge them an arm and a leg. I mean, everybody wants these licenses.”
DeSantis’ administration, however, has dragged its feet on complying with a state law requiring the Department of Health to effectively double the number of players in the industry, which now has 22 licensed operators.
The governor’s office has blamed the delay on litigation over a 2017 law, but a Florida Supreme Court decision upholding the statute was finalized last year.
It was unclear if DeSantis was referring to medical-marijuana companies already operating in the state or businesses seeking to gain entry to Florida, which insiders say has the potential to be one of the nation’s most-robust cannabis markets.
DeSantis’ comments this week coincided with MedMen Enterprises Inc.’s announcement that it had closed a $67 million deal selling its Florida operations to Green Sentry Holdings LLC.
With nearly 800,000 approved medical-marijuana patients among a population of more than 22 million Florida residents, investors are anxiously awaiting the chance to plant stakes in the state.
The 2017 law created a framework for the medical-marijuana industry and set up a schedule for new licenses to come online as the number of authorized patients increases. Under the law, state health officials should have issued at least another 22 licenses to keep up with the population of patients.
Medical-marijuana companies doing business in Florida were part of an initial group of applicants in 2015 who each paid a little more than $60,000 for a shot at being able to sell low-THC cannabis. Those applications came after lawmakers in 2014 allowed low-THC products for certain patients.
The 2016 constitutional amendment went far beyond the 2014 law. Nearly all of the operators, who were allowed to add medical marijuana with uncapped levels of THC to their product lines after the amendment passed, have changed hands since the licenses initially were granted.
Companies also pay $60,000 every two years to renew their licenses, which have routinely traded for upwards of $40 million.
“Why wouldn’t we take the opportunity to make money for the state based off those?” DeSantis said Tuesday. “But I do think that would require a statutory change (by the Legislature), and I don’t think that’s something we could just do through administrative rule.”
The governor was pointing to part of the 2017 law that limits how much the Department of Health can charge companies for licenses and renewals. The law only allows the state to charge fees to cover the costs of administering the medical-marijuana program, as well as a research program and a public-health campaign.
The law also gave health officials the ability to establish “supplemental licensure fees” to help cover the costs of the program, but the health department has never authorized such fees.
Raising application and renewal fees “would be unfortunate,” Brady Cobb, a lawyer who is the founder and CEO of Green Sentry, said in a phone interview this week.
“If it happens, it happens,” said Cobb, adding the state could make more money by taxing marijuana products or allowing operators to wholesale products to each other and taxing those sales.
The state charged a higher fee in a recent round of applications for a license earmarked in the 2017 law for a Black farmer. Under rules laid out by the Department of Health, applicants had to pay a $146,000 fee to compete for the Black-farmer license, more than twice the fee from the application process in 2015.
The department accepted a dozen applications for the Black-farmer license during a five-day period in March but has not announced the winner of the license. The agency did not respond to questions about when the license would be awarded.
The department is expected to launch a new round of applications for licenses after the Black-farmer license is finalized, but the state hasn’t laid out a timeline. At least 150 hopefuls, and possibly twice that number, are expected to apply.
