2nd time's the charm, say Florida medical marijuana businesses | Crain's Miami

2nd time's the charm, say Florida medical marijuana businesses

While the rest of the country remains focused on the presidential election, in Florida several lobbyists and business owners are fixated on one contentious constitutional amendment.

On the ballot in Florida in November, Amendment 2 seeks to legalize medical marijuana in the state. It would give physicians the discretion to prescribe medical marijuana to patients with various diseases, including cancer, epilepsy, or post-traumatic stress disorder, with wiggle room to prescribe the drug if the patient is found to have "other medical conditions of the same kind or class."

If the amendment passes, a lucrative new industry is expected to take root in Florida. And in the state's most populous region, several South Florida businesses are getting a jump on what they're sure will be a new regulatory landscape come November.

Medical marijuana is a business, after all, and a lucrative one at that: According to Jay Czarkowski, the founder of medical marijuana consultancy Canna Advisors, Florida stands to earn up to $500 million in tax revenues if the measure passes.

"Look at Colorado – since it legalized medical marijuana, the state has earned $150 million in annual tax revenue, it pulled the economy out of a recession," Czarkowski said. "Florida is four times the size of Colorado."

While Amendment 2 didn't pass muster with Florida voters in November 2014, activists supporting the measure attribute the loss to the low voter turnout typically seen in midterm elections. The results this fall should be different during a presidential election, says Ben Pollara, campaign manager and treasurer of nonprofit United for Care. From its seat in Coral Gables, United for Care was instrumental in the drafting of Amendment 2 and is pushing for its passage this year. 

"We need 60 percent to win, and we got 58 percent last time, in an election where less than 30 percent of the population voted and where the majority of voters were right-leaning," said Pollara.

Following the amendment's failure in 2014, the Florida Legislature passed the Compassionate Medical Cannabis Act, which allows a singular strain of the plant, CBD, to be sold in oil-based form.  Additionally, the law is highly restrictive regarding the amount of licenses available for local businesses interested in becoming a part of the industry.

Under the current framework, only six nurseries have been approved to cultivate and distribute CBD medical marijuana products. "We feel that a system like the one under the current law, where you have six companies allowed to sell marijuana, is a violation of the spirit and the letter of the law," said Pollara.

Amendment 2 would legalize all strains, including THC and CBD, and would allow the plant to be sold in various forms. For months now, new local businesses have been preparing for a potential change on the horizon.​

AltMed, a company headquartered in Sarasota, was ready to open shop in 2014, but the amendment's failure led AltMed to seek an alternative route. "We flipped our model in 2014 when Amendment 2 didn't pass in Florida," said Todd Beckwith, marketing director for AltMed. "We built a state-of-the-art growing and manufacturing facility in Arizona instead, where medical marijuana had just become legal."

Today, AltMed has received various accolades for its products, which the company claims uniquely positions it to serve Florida. “We have spent the last two years bringing our pharmaceutical industry, scientific standards to the development and testing of our products to create the purest and most reliable products on the market in Arizona via our affiliate there,” Beckwith said.

AltMed, meanwhile, has made a significant capital investment in a Florida venture, despite the fact that Amendment 2 hasn't yet passed. "We own 20 acres of a local nursery in Sarasota that has been approved by the city to grow once we're licensed," Beckwith said. "We've begun construction of the initial 10,000-square-foot greenhouse, with an option to expand significantly as the business grows." AltMed plans to work with various dispensary partners to get the business off the ground.

The company will have plenty of options, as there are scores of dispensaries currently operating in the state, even under the more restrictive standards. In South Florida alone, there are over 260 dispensaries, according to floridamedicalmarijuana.net. A popular dispensary and supplies shop, Nugbrand, recently opened its second location in North Miami. "We expect to be able to sell all strains immediately once the amendment passes," a store employee said.

However, Czarkowski and Pollara caution that the full legalization and regulation of medical marijuana won't happen overnight. "Let's say Amendment 2 passes in November, license applications won't come out until late next summer, and the applications will probably be due in the fall," Czarkowski explained, "meaning licenses will be awarded in January or February 2018."

Being ready to begin immediate operations – like AltMed has done – will save companies time, he said, and will likely get their products to market much faster.

August 18, 2016 - 3:49pm