Florida Picks 5 Nurseries to Grow and Distribute Medical Marijuana for Select Patients

Nearly a year behind schedule, Florida health officials on Monday selected five “dispensing organizations” to grow, process and distribute non-euphoric medical marijuana for a select group of sick patients.

But many in the industry believe that the biggest challenge in the drawn-out process is yet to come.

The five winners, who scored the highest of 28 applications, are Hackney Nursery in the Northwest region of the state; Chestnut Hill Tree Farm in the Northeast; Knox Nursery in the Central region; Alpha Foliage in the Southwest region; and Costa Nursery Farms in the Southeast region.

Parents of children with severe epilepsy pushed for a 2014 law to legalize the purportedly non-euphoric marijuana — low in euphoria-inducing tetrahydrocannabinol, or THC, and high in cannabadiol, or CBD — and contended that it can end or dramatically reduce life-threatening seizures.

Sen. Rob Bradley, who was instrumental in passing the law, said he congratulated state Surgeon General John Armstrong early Monday morning. Applications for the licenses were due on July 8, and Bradley and other lawmakers had become frustrated that it was taking the Department of Health so long to pick the five dispensing organizations.

“I think now the attention should be focused on the industry to make sure that they cause no further delays and we move forward getting this product to these suffering families as quickly as possible,” Bradley, R-Fleming Island, said. “The department did its job. And now it’s time for the industry to step up. No further delays. Let’s move forward.”

But legal challenges over the awarding of the licenses are almost a given.

“It has always been anticipated that there will be challenges, and I’ve seen nothing in this process to persuade me that we will not see some of the winners challenged,” said Louis Rotundo, a lobbyist who represents the Florida Medical Cannabis Association and who also has a small ownership interest in at least one of the losing applicants.

Losers have 21 days to file challenges, but Patricia Nelson, a former director of the Department of Health’s Office of Compassionate Use who served on the three-member panel that graded the applications, said earlier this year that the challenges to the licenses will not hold up the process.

The winners of the licenses have 75 days to request “cultivation authorization” and, once that authorization has been granted, must begin dispensing the low-THC products within 210 days, meaning that the low-THC products could be on the shelves by next summer. The winners also have 10 business days to post $5 million performance bonds.

Meanwhile, losing applicants are trying to make sense of more than 600 pages of scorecards used to grade the applications by the panel comprised of Nelson; her successor, Christian Bax; and accountant Ellyn Hutson.

“I’ve got a number of calls from people trying to figure out how they got scored,” said Jeff Sharkey, a lobbyist who formed the Medical Marijuana Business Association of Florida and is affiliated with two nurseries that didn’t make the cut. “From that, people will make some decisions. Going back to growing tomatoes is option one. Option two is, some people have raised concerns about the perception of the nursery rulemaking committee and trying to figure out their scores and whether or not there are grounds for a protest. That’s kind of a normal review process for folks who’ve lost.”

Implementation of the law has been delayed due to legal challenges and an administrative law judge, who last year rejected the Department of Health’s first stab at a rule that would have used a lottery system to choose the license winners.

The department then held a rare “negotiated rulemaking workshop” — comprised of industry insiders, including Florida nurseries and marijuana experts from other states — to craft the regulations for the state’s marijuana industry.

Under the law passed last year and approved by Gov. Rick Scott, only nurseries that have been in business in Florida for at least 30 years and grow a minimum of 400,000 plants at the time they applied for a license were eligible to become one of the five dispensing organizations.

The nurseries teamed up with a variety of consultants, including out-of-state marijuana growers, in the hopes of edging out the competition.

Four of the five winners of the licenses — Chestnut Hill, Costa, Hackney and Knox — were represented on the rulemaking committee.

One of the most high-profile losers among the 28 applications was Loop’s Nursery, a Jacksonville grower that teamed up with the Stanley Brothers, a Colorado family that developed the “Charlotte’s Web” strain of cannabis whose name has become almost synonymous with low-THC, high-CBD medical marijuana.

Peyton Moseley, the husband of committee member Holley Moseley, is also part of Loop’s team. Holley Moseley heads up the “Realm of Caring Florida” non-profit organization also linked with the nursery. The Moseleys lobbied fiercely for the low-THC law on behalf of their daughter, RayAnn, last year.

Nearly all of the winners are represented by some of Tallahassee’s most influential lobbyists. Costa is represented by the Southern Strategy Group, while lobbyist Brian Ballard represents Hackney and Jorge Chamizo is the registered lobbyist for Knox Nurseries.

Alpha Foliage, owned by John and Carolyn DeMott, applied in two separate regions. The nursery has partnered with Surterra Florida, a limited liability corporation whose officers include two Atlanta investors also seeking to establish a footprint in Georgia’s nascent medical-marijuana industry. Alex Havenick, whose mother Barbara owns greyhound tracks in Naples and Miami, is also one of the officers of the Florida group. The nursery is also affiliated with Surterra Holdings, represented by lobbyists Ron Book and Billy Rubin.

Many of the applicants had applied for the low-THC licenses in the hope of expanding their businesses in the event that a constitutional amendment legalizing full-strength medical marijuana passed. That amendment narrowly failed last year, but a nearly identical measure is almost certain to go before voters next November.

–Dara Kam, News Service of Florida