Outdoor cannabis cultivation. Credit: Yarygin/Shutterstock.com

Calling a Tampa company's effort to get a medical marijuana license a "stunt," Gov. Ron DeSantis' administration is asking the Florida Supreme Court to reject an appeals court ruling that could upend the state's medical cannabis industry.

The Florida Department of Health is challenging a July appellate decision that found a state law requiring medical marijuana operators to grow, process and sell cannabis and derivative products, a system known as "vertical integration," runs afoul of a constitutional amendment that broadly legalized medical marijuana.

The department went to the Supreme Court in a lawsuit filed by Florigrown, a company owned in part by strip-club operator Joe Redner. The company filed the case after state health officials rejected its request for a medical marijuana license shortly after the constitutional amendment went into effect in 2017.

Leon County Circuit Judge Charles Dodson last year ordered state health officials to begin registering Florigrown and other medical marijuana firms to do business, but his order has been on hold since the state appealed.

In July, the First District Court of Appeal upheld in part Dodson's ruling that found the state's vertical integration system conflicted with the constitutional amendment, approved by more than 70% of voters in 2016.

DeSantis appealed that decision, and the Florida Supreme Court agreed to take up the case.

In an initial brief filed last week, lawyers representing DeSantis and health officials argued that the appellate court was wrong to uphold the temporary injunction ordered by Dodson.

The state's introduction to the 54-page brief chastises Redner and his partner, Adam Elend, saying they had "no revenue, significant assets, or relevant industry experience" when Florigrown applied for a medical marijuana license.

"The company … is run by a web video producer and owned by Joe Redner, neither of whom are botanists, pharmacists, physicians or have any professional experience or credentials in the medical field," the state's lawyers wrote.

Florigrown sought to "register" itself as a medical marijuana operator by sending a letter to state health officials two weeks after the constitutional amendment went into effect, the state explained.

"This stunt, which makes a mockery of all legal and regulatory procedures related to" the constitutional amendment "has resulted in the case now before this court," the state's lawyers argued.

The temporary injunction hinges on language in a state law, passed in 2017 as the Legislature carried out the constitutional amendment.

Under the law, the vertical integration system requires operators, dubbed "medical marijuana treatment centers," to handle all aspects of the cannabis trade. Critics of vertical integration contend that it shuts out firms that could perform individual aspects of the marijuana business.

The statute also says medical marijuana treatment centers "shall cultivate, process, transport, and dispense marijuana for medical use," while the amendment says a medical marijuana treatment center is an entity that "acquires, cultivates, possesses, processes … transfers, transports, sells, distributes, dispenses, or administers" medical marijuana.

The law requires entities to "conform to a more restricted definition" than is provided in the amendment, the majority in the 2-1 appellate court decision said this summer.

In a concurring opinion, Judge Scott Makar accused the Legislature of "rewriting clear language in the Constitution" by "transforming a disjunctive 'or' into a conjunctive 'and.' "

The appeals court agreed to ask the Supreme Court to weigh in on whether the vertical integration system and a cap on the number of marijuana licenses included in the state law "are in direct conflict" with the constitutional amendment.

In the brief filed last week, the state's lawyers argued "nothing in the amendment alters the Legislature's power to make policy decisions related to the regulatory oversight of medical marijuana in Florida."

The Legislature was acting within its authority "when it created a broad regulatory scheme to implement the amendment, including regulations for the licensing and structure of MMTCs," the lawyers wrote, using the acronym for medical marijuana treatment centers.

"Indeed, the amendment itself contemplates legislative action," they added.

The appellate court "overlooked the Legislature's broad lawmaking authority" when evaluating Florigrown's challenge, the state's lawyers wrote, arguing that Florigrown does not have a substantial likelihood of success on the merits of the case.

The constitutional amendment "is silent" as to the number of operators that may be registered in the state or whether the medical marijuana treatment centers should be horizontally or vertically integrated, the state's lawyers argued.

"Most importantly, nothing in the amendment expressly prohibits the Legislature from making policy decisions on those two points," they added.

The state also tried to persuade the Supreme Court to uphold the cap on the number of medical marijuana operators included in the law.

The cap on licenses "ensures adequate oversight of a burgeoning industry," the DeSantis administration lawyers argued.

The limit on the licenses was also designed to ensure that medical marijuana "would not be diverted to other states where it remains illegal, that it would not be diverted to minors" and that operators would not use medical marijuana "as a pretext … for other illegal activities," the state's lawyers wrote.

"Steady expansion, commensurate with need, also fulfills the amendment's purpose of giving patients access to the safe use of medical marijuana," they argued.

Doing away with the cap on the number of medical marijuana operators in Florida would almost certainly cause the value of existing licenses, which have sold for upward of $50 million, to plummet.

The state's lawyers also argued that Dodson's ruling and the subsequent appellate court decision "injected confusion and uncertainty" into the registration process for medical marijuana vendors and "attempts to radically alter the status quo."

DeSantis' administration is asking the Supreme Court to send the case back to Dodson and tell the circuit judge to deny Florigrown's motion for a temporary injunction.

Dara Kam reports for the News Service of Florida.