Licensing Issues

Subscribe to Licensing Issues

Green California Vector IllustrationIn an Alert published Thursday, Fox partner Tracy Gallegos and associate Lynnel Reyes examined new emergency regulations recently proposed by the California Department of Public Health to allow Type 6, 7, or N cannabis licensed manufacturers to register their facility as a “shared-use” facility. The regulations also provide for a new license, the Type S license, which would allow licensees to create infusions, package and label cannabis products and conduct extractions with butter or food grade oils (provided that the extract or concentrate produced may only be used in infused products manufactured by that licensee.) The regulations are expected to be approved by tomorrow, April 13, 2018.

Tracy and Lynnel outline the details of the proposed regulations and the new Type S license, including its benefits, associated concerns and the application process.

To read their full discussion, please visit the Fox Rothschild website.

As Florida’s 2018 legislative session comes to a close, its time to review legislative changes to Florida’s medical marijuana laws.

First, Florida’s Senate passed HB 6049,  This bill removes the requirement that the Florida medical marijuana license (Florida has a vertical licensing system) reserved for a Black farmer must go to a Black farmer who is a member of the Black Farmers and Agriculturalists Association.

As I explained in my earlier posts (here and here), Columbus Smith, a Black farmer from Panama City, filed a lawsuit challenging the law implementing Amendment Two (medical marijuana) alleging that the law was unconstitutional.

Second, the Florida legislature has withheld funds for the Florida Department of Health (putting the funds in reserve) in an effort to spur the Department of Health to move more quickly on regulations implementing Amendment Two (medical marijuana) which passed in 2016.

Dori K. Stibolt is a West Palm Beach, Florida based partner with Fox Rothschild LLP.  She focuses her practice on litigation and labor and employment issues and has taken a special interest in the cannabis business.  You can contact Dori at 561-804-4417 or dstibolt@foxrothschild.com.

Following up on my post from earlier this week, the Florida Senate Health committee unanimously passed SB 1134 which would strip out the requirement that black farmers who want to obtain a coveted medical marijuana license be a member of the Florida Chapter of the Black Farmers and Agriculturalists Association (which has closed its membership).

As I explained in my earlier posts (here and here), Columbus Smith, a black farmer from Panama City, filed a lawsuit challenging the law implementing Amendment Two (medical marijuana) alleging that the law was unconstitutional.

Recently, a Leon County, Florida Judge sided with Smith and granted a temporary injunction in the case, which signals that Smith’s case has a strong likelihood of prevailing in court.

Dori K. Stibolt is a West Palm Beach, Florida based partner with Fox Rothschild LLP.  She focuses her practice on litigation and labor and employment issues and has taken a special interest in the cannabis business.  You can contact Dori at 561-804-4417 or dstibolt@foxrothschild.com.

Last week, Leon County, Florida Circuit Judge Charles Dodson granted a temporary injunction sought by Columbus Smith regarding a portion of the Florida law passed last year to implement Amendment Two (medical marijuana).  I posted before about Smith’s lawsuit.

The law implementing Amendment Two called for an overall increase of 10 licenses for Medical Marijuana Treatment Center (Florida has a vertical integrated license structure which means licensed Medical Marijuana Treatment Centers grow, distribute and sell medical marijuana) by October 3, 2017.  But, the law also provided that one (1) of those licenses go to a black farmer who had been a party to settled lawsuits (known as Pigford I and Pigford II) regarding discrimination by the federal government against black farmers.  The law also said that the black farmer who receives the medical marijuana license would have to be a member of the Black Farmers and Agriculturalists Association-Florida Chapter.  Mr. Smith had been a member of Pigford I and Pigford II, but the Black Farmers and Agriculturalists Association had closed their membership and would not issue a membership to Mr, Smith.

The Florida Constitution bars “special” laws that relate to a “grant of privilege to a private corporation.”  Mr. Smith’s lawsuit alleged the medical marijuana law violated that part of the Constitution.

In issuing the temporary injunction, Judge Dodson ruled that Mr. Smith has a substantial likelihood of success of proving that the law is unconstitutional.

Plaintiff will likely suffer irreparable harm if this court does not enjoin the department from issuing the black farmer license because the law only applies to members of the association and plaintiff … will not be able to apply or qualify for such a license, because he is not a member of the association.

Judge Dodson’s Court Order also asked both sides to come up with a plan to resolve the issue by June, 2018.

Senate budget chief Rob Bradley, a Fleming Island Republican, said the Legislature will likely strip out the part of the law requiring membership in the association for an applicant to be eligible for the black-farmer license.

Dori K. Stibolt is a West Palm Beach, Florida based partner with Fox Rothschild LLP.  She focuses her practice on litigation and labor and employment issues and has taken a special interest in the cannabis business.  You can contact Dori at 561-804-4417 or dstibolt@foxrothschild.com.

Las Vegas Strip, Las Vegas, Nevada

Approximately 43 million tourists visit Las Vegas annually, and of those tourists, some undoubtedly consume marijuana during their visits.

There is just one major issue: There is no place for the tourists to consume it. Pursuant to Nevada recreational use regulations, consumption is to be done privately, not publicly. Recreational use in gaming establishments, hotels, or concerts is strictly prohibited.

However, the City Council of Las Vegas has drafted a proposed ordinance to permit the operation of marijuana consumption lounges. Here are several key takeaways from the proposed ordinance:

  • Employees are prohibited from consuming marijuana in the establishment during business hours
  • Employees of the marijuana consumption lounge must be at least 21 years of age
  • Visitors of the marijuana consumption lounge must be at least 21 years of age
  • The establishment must be appropriately concealed as to not allow viewing by the general public
  • The establishment may obtain a nightclub license for live entertainment to be performed on the premises
  • The licensee must obtain a special use permit for the establishment to operate specific commercial, industrial, or hybrid commercial/industrial zoning districts.

The proposed regulation could take effect by March or April of 2018. Sooner rather than later, tourists and residents may be able to enjoy the consumption of marijuana in a more social setting. If the proposed ordinance passes, Las Vegas may experience an increase in annual tourists as a result.

As I’ve posted before, here and here, Florida has struggled with its roll out of Amendment Two (medical marijuana) with delays in issuing licenses, processing patient i.d. cards, etc.

Now comes news that Tetra Health Company, a California based company which quickly opened several medical marijuana clinics in Florida, is now, just a few months later, closing up most of their Florida locations.  Tetra is not affiliated with a state licensed Medical Marijuana Treatment Center (Florida has a vertical integrated license structure which means licensed Medical Marijuana Treatment Centers grow, distribute and sell medical marijuana) but instead has a business model that provides medical marijuana certification doctors that guide patients through the Florida state registration process.  Once the patients receive their i.d. cards from the State of Florida they can go to any medical marijuana dispensary.

Tetra’s Tampa, Florida location will remain open.

Dori K. Stibolt is a West Palm Beach, Florida based partner with Fox Rothschild LLP.  She focuses her practice on litigation and labor and employment issues and has taken a special interest in the cannabis business.  You can contact Dori at 561-804-4417 or dstibolt@foxrothschild.com.

Pursuant to the law passed earlier this year which implemented Amendment Two (medical marijuana), Florida was required to issue additional licenses for medical marijuana treatment centers (the entities that grow, distribute and sell medical marijuana) to bring the number of licenses up to ten by October 3, 2017.

Florida has missed this deadline due to Hurricane Irma (which caused extensive damage and power outages in South Florida and the Keys) and because of litigation filed recently which alleged that the law was unconstitutional as to the license reserved for a black farmer.

_______________

Dori K. Stibolt is a West Palm Beach, Florida based partner with the law firm of Fox Rothschild LLP.  She focuses her practice on litigation and labor and employment issues.  You can contact Dori at 561-804-4417 or dstibolt@foxrothschild.com.

A lawsuit was recently filed which challenges the constitutionality of part of the Florida law implementing Amendment Two (medical marijuana).  A key part of the law was expanding the number of growing licenses that would be awarded to farmers/operators in the lucrative medical marijuana business.

The law implementing Amendment Two called for an overall increase of 10 licenses by October 3, 2017.  But, the law also provided that one (1) of those licenses go to a black farmer who had been a party to settled lawsuits about discrimination by the federal government against black farmers.  The law also said that the black farmer who receives the medical marijuana license would have to be a member of the Black Farmers and Agriculturalists Association-Florida Chapter.

Columbus Smith, a black farmer from Panama City, Florida filed the lawsuit.  Mr. Smith alleges that the law is so narrowly drawn that only a couple of black farmers could qualify for the license.  The lawsuit contends that the carve-out license is what is known as an unconstitutional “special law.”

The lawsuit said Mr. Smith meets the qualification of being part of the litigation (known as “Pigford I” and “Pigford II”) about discrimination against black farmers.

But, Mr. Smith has not been allowed to join the black farmers association, precluding him from receiving a license.  According to the lawsuit, the association is not accepting new members.

There is no rational basis for limiting the opportunity of black farmers to obtain a medical marijuana license to only the few members of that class of black farmers who are also member of a specific private association.

Mr. Smith’s lawsuit seeks an injunction against the Florida Department of Health’s issuing a license related to the black farmer.

_______________

Dori K. Stibolt is a West Palm Beach, Florida based partner with the law firm of Fox Rothschild LLP.  She focuses her practice on litigation and labor and employment issues.  You can contact Dori at 561-804-4417 or dstibolt@foxrothschild.com.

As a follow up to my post on the City of Boynton Beach having its regulations overturned by Florida state law, other Florida municipalities are debating medical marijuana dispensaries.

Those adopting or extending moratoriums on dispensaries:

  • Marathon City, located in the Keys, has extended its moratorium for another 180 days.
  • Winter Garden, located near Orlando, recently voted in favor of a moratorium.
  • Collier County has also imposed a county-wide moratorium through the end of 2017.
  • Coral Gables, located near Miami, has also voted to impose a ban on dispensaries.
  • City of Sarasota, located south of Tampa, imposed a 60 day moratorium.

Miami Beach is investigating a creative workaround to impose some local control on dispensaries.  Miami Beach is looking into changing the zoning rules for pharmacies within their borders since municipalities are required to regulate dispensaries as they do pharmacies.

Meanwhile, the first dispensary in the City of Jacksonville, Florida recently opened its doors.  Tallahassee, the capital of Florida, also recently had its first dispensary open.

_________

Dori K. Stibolt is a West Palm Beach, Florida based partner with the law firm of Fox Rothschild LLP.  She focuses her practice on litigation and labor and employment issues.  You can contact Dori at 561-804-4417 or dstibolt@foxrothschild.com.

Cannabis and the law
Copyright: jirkaejc / 123RF Stock Photo

A temporary restraining order granted to a group of alcohol distributors may delay the sale of recreational marijuana in Nevada, which was scheduled to begin on July 1. On May 30, 2017, the First Judicial District Court of Nevada issued the temporary restraining order, which essentially prohibits the Nevada Department of Taxation from enforcing a May 31 deadline for submitting recreational marijuana license applications.

The plaintiff alcohol distributors have alleged that the ballot measure to legalize recreational marijuana provided, among other things, that for a period of eighteen months after the implementation of recreational marijuana licensing regulations, only holders of wholesale liquor licenses could apply to be marijuana distributors in the state. However, the ballot measure also allowed the Department to open up the application process to others if the number of wholesale liquor applicants would result in an insufficient number of marijuana distributors. The Department determined that there was insufficient interest from liquor licensees and opened up the application process to others, including current holders of medical marijuana licenses, provided that their licenses are in good standing.

State officials have stated that by one day prior to the May 31 deadline for license applications, only one liquor licensee had applied for a marijuana distribution license. The alcohol distributors contend that this is not accurate and that more applications were submitted by liquor licensees. State officials expect that another hearing will be held on the temporary restraining order within the next few weeks. Until then, the stay on the issuance of recreational licenses will remain in place.