Those celebrating the passage of the Charlotte’s Web medical cannabis legislation through the Florida House and Senate need to be wary of the potential poison pill attached to the bill. Only 21 nurseries in Florida are eligible to produce the low-level Tetrahydrocannabinol (THC) strain of the medicinal marijuana pursuant to a last-minute amendment added to the measure. Given the costs of producing the special strain of the pot and the potential for increased competition in the event the Florida medical marijuana constitutional amendment passes in November, a possibility exists that nurseries will remain on the sideline until year-end.
The language of the bill approved by the House and Senate in Florida states that only growers allowed to have an inventory of at least 400,000 plants and 30 years of uninterrupted experience qualify to produce the low THC medical marijuana. The amendment to the bill was inserted by Representative Matt Caldwell (R-Lehigh Acres), an initial sponsor of the measure, just prior to the House vote. The House did not debate or discuss the amendment before voting 111-7 in favor of the bill. The Senate previously approved a different version of the bill, but approved the House re-write without debate over the amendment in a 30-9 vote.
The owner of one of the 21 eligible nurseries, Rick Brown, states that the likely start-up cost to produce the Charlotte’s Web medical marijuana in Florida is about $10 million. The marijuana would need to be produced indoors to protect from wind and storms. Additionally, the bill requires posting a $5 million bond, providing security for the growing area and background checks for the owners and managers. While the indoor facility may not create significant additional costs based on use of existing facilities, the nursery would need to forgo growing other profitable plants to make room for the marijuana. Finally, the nursery producing the cannabis must hire a Florida physician as a medical director for the operation.
Backroom dealing for passage of legislation occurs frequently. In this instance, the bill enjoyed bipartisan support, but Governor Scott never committed to signing the measure if passed by the legislature. Once the amendment was added to the bill, the Governor indicated he would not exercise his veto power. While having a requirement for nursery size and experience makes sense from a policy perspective, inserting a clearly excessive 30 year experience requirement shows other forces at work. Either the Governor and his legislative supporters wanted the profits from the Charlotte’s Web production to go to a very limited number of Republican friendly nurseries or the effort represents a poison pill for the Florida medical cannabis legislation.
Investing the start-up costs necessary for Charlotte’s Web production might be a no-brainer if Amendment Two were not on the ballot in November. The market for the low THC medical marijuana exists and the product will sell. Nevertheless, before making the significant down payment to begin production, any wise nursery owner will consider what happens if Amendment Two passes. In the event Amendment Two becomes part of the Florida Constitution and presumed Democratic nominee Charlie Crist beats Rick Scott, then any nursery taking a stab at Charlotte’s Web production will likely have significant competition and the approved medical marijuana will not be limited to the low THC strain. What constitutes a monopoly at the moment will change if the apparently popular amendment passes and Crist wins.
The calculus is different if Amendment Two wins and Rick Scott also wins. The amendment requires the Department of Health to issue regulations regarding the medical cannabis and a Scott administration could control the rule making by the Department. The Charlotte’s Web legislation could provide a roadmap for the Department of Health in its regulatory effort. Signing the bill gives Scott ammunition against Crist in the November election by demonstrating Scott’s support for tightly controlled medical cannabis. Allowing the bill to pass with the nursery experience amendment gives Scott a double legislative win: he reduces the potential for attack ads and he pushes marijuana production to only selected growers.
Governor Scott succeeded in turning a bill he never really supported into a legislative win. The Charlotte’s Web medical cannabis bill passed by the Florida Legislature last week either creates a revenue stream for one or more Scott supporters or sets up a poison pill keeping nurseries on the sideline until after the election. Florida families with epileptic children are waiting to see who steps up the plate to begin production.
Opinion by William Costolo
WAVE 3 News