Florida will open up more medical marijuana licenses, double the size of state's industry

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State health regulators on Monday set in motion a process to issue up to 22 more medical-marijuana licenses, in a highly anticipated move that could double the size of Florida’s medical-cannabis industry.

The state Department of Health also published an emergency rule that would make it far more expensive for marijuana operators to renew their licenses every two years, increasing the cost from roughly $60,000 to more than $1 million.

The jump in the renewal fees came after Gov. Ron DeSantis this year said medical-marijuana companies weren’t paying enough to operate in the state, where licenses have sold for more than $50 million.

Under an emergency rule setting up the process to apply for new licenses, health officials would accept applications in “batching cycles.” The plan said the windows for the batching cycles will be established in a separate rule but did not say how many licenses would be up for grabs in each cycle.

The rule also set the application fee for new licenses at $146,000, more than double the $60,830 fee established during the state’s initial round of licensing more than five years ago.

The release of the rules on Monday created an immediate buzz among industry attorneys, lobbyists and investors.

Health officials were “clever” to include the batching-cycle provision in the application rule, Sally Kent Peebles, a Jacksonville-based partner at the national cannabis-law firm Vicente Sederberg LLP, told The News Service of Florida.

“It was quite brilliant to include the language regarding the batching cycle, and I would think the reason they did that is to avoid all this costly litigation that we’ve seen in the past,” Peebles said.

Losing applicants would have the opportunity to apply for licenses during another batching cycle, which could affect their ability to file legal challenges, according to Peebles.

“An unsuccessful group would be less inclined and has the wind taken out of the argument’s sails when the Department of Health can say … ‘You have the chance to reapply,’” Peebles said.

With more than 22 million residents and an aging population, Florida is viewed as one of the hottest medical-marijuana markets in the country. Florida, which has 22 licensed operators, had more than $1 billion in medical-marijuana sales in the first six months of 2022, according to Headset, a cannabis data analytics company.

“We appreciate the department moving forward on this important next step and look forward to filing an application once the window opens,” Daniel Russell, an attorney with the Dean Mead firm who represents applicants, told The News Service of Florida.

A 2017 law, which created a framework for the state’s medical-marijuana industry, required the Department of Health to grant new licenses as numbers of authorized patients increase. With more than 775,000 patients, the state should have issued at least another 22 licenses to keep up with the population of patients.

But the DeSantis administration has left the application process in limbo since the governor took office in 2019.

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