TALLAHASEE — As medical marijuana companies in Florida continue to make cash, Gov. Ron DeSantis said this week that cannabis businesses should pay more for opportunities to do business in the state.
The state “should charge these people more,” DeSantis told reporters on Tuesday.
“So these are very valuable licenses,” the governor said. “I charge them an arm and a leg. I mean, everybody wants these licenses.”
It’s unclear if DeSantis is referring to medical marijuana companies that already have operations in the state or companies that are considering entering Florida, the insider said. It could become one of the strongest cannabis markets in the United States, he said.
DeSantis hopes to get more money out of the business, but the governor helped get the big bucks in one of the first legislative pushes after taking office in January 2019 .
DeSantis urged lawmakers to repeal the ban on smokeable marijuana, which was outlawed by the Republican-controlled Congress after voters passed a constitutional amendment to broadly legalize medical marijuana in 2016.
The state legislature quickly complied with DeSantis’ request, and the whole flower product became the most popular product at more than 460 medical marijuana dispensaries across the state.
DeSantis’ comments come this week as MedMen Enterprises Inc. announced that it had entered into a $67 million agreement to sell its Florida operations to Green Sentry Holdings LLC.
With nearly 800,000 medical marijuana patients approved among more than 22 million Florida residents, investors are eagerly awaiting the opportunity to invest in the state.
But the DeSantis administration is stepping in to comply with state laws requiring the Department of Health to effectively double the number of players in the industry, which currently has 22 licensed operators.
The governor’s office has blamed delays on litigation over the 2017 law, but the Florida Supreme Court last year ruled in favor of the law.
A 2017 law created a framework for the medical marijuana industry and set a schedule for new licenses to come online as the number of licensed patients increased. had to issue at least 22 more licenses to keep up with
Medical marijuana companies operating in Florida were part of the first group of applicants in 2015, each paying just over $60,000 to be able to sell low-THC cannabis. These applications came after lawmakers approved low-THC products for certain patients in 2014.
The 2016 constitutional amendment went far beyond the 2014 law. Nearly all operators allowed to add medical marijuana containing uncapped levels of his THC to their product lines after the amendment was passed would have held the owner since the license was first granted. It has changed.
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Companies also pay $60,000 every two years to renew their licenses.
“Why not take the opportunity to make money for the state based on them?” DeSantis said Tuesday. “But I think that would require legislative change[by the legislature]and I don’t think it can be done by administrative regulations alone.”
Florida law requires legislative approval of regulations if regulatory costs for all companies participating in the program exceed $200,000 over a one-year period or $1 million over a five-year period.
The governor noted that part of the 2017 law limits the amount the health ministry can charge businesses for licenses and renewals. The law only allows states to charge fees to cover the costs of administering medical marijuana programs, research programs, and public health campaigns.
The law also gave health officials the power to set “additional licensing fees” to cover program costs, but the health department has never approved such fees.
Lawyer Brady Cobb, founder and CEO of Green Sentry, said in a phone interview this week that the increase in application and renewal fees is “disappointing.”
“If it happens, it will happen,” Cobb said, adding that by taxing marijuana products or allowing businesses to wholesale their products to each other and tax their sales, states could do more. He added that he could make a lot of money.
The state charged higher fees in a recent series of applications for black farmer licenses as specified in the 2017 law. Under rules laid down by the Department of Health, an applicant had to pay a fee of $146,000 to compete for a black farming license. This is more than double her fee for her 2015 application process.
The ministry received 12 applications for black farming licenses in five days in March, but has not announced a license winner. The agency did not respond this week to questions about when the licenses will be awarded.
The department plans to begin applying for a new round of licenses after black farmer licenses are finalized, but the state has not provided a timeline. expected to apply.
DeSantis argues the state isn’t charging enough for licenses, but Florida’s license and renewal rates already surpass most other states.
But that’s because the state’s medical marijuana industry is structured, said Sally Kent Peebles, partner at Jacksonville-based national cannabis law firm Vicente Cederberg LLP.
Florida licenses are considered “the most valuable licenses in the world,” Peebles told the Florida News Service in an interview this week.
Their value is based, in part, on state licensing systems that require businesses to grow, process, and sell marijuana and derivative products without limiting the number of retail outlets a business can operate. .
“Licensing costs are much lower in most states, but Florida is far more unique than any other because it is the only state that allows one license to open an unlimited number of facilities. said Peebles. He said.
Peebles also said most marijuana businesses don’t make as much profit as people believe. The IRS prohibits businesses from taking tax credits except those related to the cost of goods sold. This means companies are “taxed on ghost income” at rates of 85% or more, said Peebles, who has represented hundreds of medical marijuana clients in various states.
“So the idea that these companies are making millions of dollars is like sitting around and messing with your thumbs and laughing at everyone while raking dough,” she said.
Potential applicants for the next batch of licenses hope Florida voters will approve a proposed constitutional amendment in 2024 to legalize recreational use of marijuana. The initiative was launched earlier this month.
“I don’t think the application fee will deter people,” Mr. Peebles predicted.
Dara Kam, Florida Press