Medical-Marijuana Operator Challenges Pot License Fee Hike
The fee increase came after Gov. Ron DeSantis said medical-marijuana operators, whose licenses have sold for upward of $50 million until recently, need to pay more for the opportunity to do business in Florida.
November 06, 2023 at 01:37 PM
4 minute read
Health CareArguing that a $1.33 million price tag is unjustified, a medical-marijuana operator is challenging a license-renewal fee boost that came after Gov. Ron DeSantis said pot companies aren't paying enough to conduct business in Florida.
The state Department of Health in December adopted a rule creating a formula that set the license-renewal fee for medical-marijuana operators at $1.33 million every two years — more than 22 times the $60,000 biennial fee operators had been paying since the program started six years ago.
The formula is based on the number of licensed operators and the cost to regulate the medical-marijuana program. But the fee does not take into account tens of millions of dollars collected by the agency from patients and caregivers who pay $75 a year for identification cards to participate in the program.
The revised license-renewal fee is "an exponential increase" from the previous amount, lawyers for Sanctuary Cannabis, whose license is due for renewal in January, argued in a challenge filed last week.
Sanctuary's petition for an administrative hearing relied heavily on a budget request the health department submitted to the Legislature for the 2024-2025 fiscal year, which will begin in July.
The request showed that the Department of Health collected $14.9 million in application and renewal fees for licenses and nearly $65 million from patients and caregivers during the 2022-2023 fiscal year, which ended in June. Currently, more than 854,000 patients are qualified for the program.
The agency, which also gets money from testing labs and fines, collected a total of roughly $84 million that year, anticipates collecting the same amount this year and projects receiving $114 million in 2024-2025, according to the budget request.
The agency also reported having a $16.3 million surplus during the 2022-2023 fiscal year and projected surpluses of nearly $4 million this year and $61 million in 2024-2025.
Setting the renewal-fee amount "without accounting for significant and undisputed streams of fee revenue is wholly without logic or reason," Sanctuary's lawyers argued in the petition filed at the state Division of Administrative Hearings.
"The petitioners [Sanctuary] take no issue with the department running a surplus or otherwise receiving any fee, fine, or cost that is necessary to support its operation. However, in light of the department's own income and projections, the department cannot reasonably assert that this exponential renewal fee increase is necessary to keep its operations afloat," attorneys Will Hall and Daniel Russell of the Dean Mead firm wrote in the Oct. 26 petition.
The biennial $1,332,124.42 fee "imposes inappropriately high regulatory costs" on operators, "rendering the challenged rules invalid," the lawyers argued.
Florida voters in 2016 approved a constitutional amendment authorizing medical marijuana for a broad swath of patients. A 2017 law setting up the framework for the medical-marijuana industry gave the health department the authority to set license application and renewal fees "sufficient to cover the costs of implementing and administering" the program, as well as public education and research about cannabis.
The fee increase came after DeSantis said medical-marijuana operators, whose licenses have sold for upward of $50 million until recently, need to pay more for the opportunity to do business in Florida.
The state "should charge these people more," DeSantis told reporters in August 2022.
"I mean, these are very valuable licenses," the governor told reporters. "I would charge them an arm and a leg. I mean, everybody wants these licenses."
Many operators in Florida and the rest of the country, however, have struggled with finances because marijuana remains illegal under federal law, which creates banking hurdles and forces companies to pay higher corporate-income taxes.
Dara Kam reports for the News Service of Florida.
NOT FOR REPRINT
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllRFK Jr. Will Keep Affiliations With Morgan & Morgan, Other Law Firms If Confirmed to DHHS
3 minute readAttorneys, Health Care Officials Face Nearly $80M RICO Suit Over Allegedly Fabricated Spreadsheet
Amid Growing Litigation Volume, Don't Expect UnitedHealthcare to Change Its Stripes After CEO's Killing
6 minute readTrending Stories
- 1Bar Groups Say IOLA Settlement Protects Civil Litigants' Fund From Future 'Raids'
- 2'Every MAGA Will Buy It:' Elon Musk Featured in Miami Crypto Lawsuit
- 3Pennsylvania Law Schools Are Seeing Double-Digit Boosts in 2025 Applications
- 4Meta’s New Content Guidelines May Result in Increased Defamation Lawsuits Among Users
- 5State Court Rejects Uber's Attempt to Move IP Suit to Latin America
Who Got The Work
J. Brugh Lower of Gibbons has entered an appearance for industrial equipment supplier Devco Corporation in a pending trademark infringement lawsuit. The suit, accusing the defendant of selling knock-off Graco products, was filed Dec. 18 in New Jersey District Court by Rivkin Radler on behalf of Graco Inc. and Graco Minnesota. The case, assigned to U.S. District Judge Zahid N. Quraishi, is 3:24-cv-11294, Graco Inc. et al v. Devco Corporation.
Who Got The Work
Rebecca Maller-Stein and Kent A. Yalowitz of Arnold & Porter Kaye Scholer have entered their appearances for Hanaco Venture Capital and its executives, Lior Prosor and David Frankel, in a pending securities lawsuit. The action, filed on Dec. 24 in New York Southern District Court by Zell, Aron & Co. on behalf of Goldeneye Advisors, accuses the defendants of negligently and fraudulently managing the plaintiff's $1 million investment. The case, assigned to U.S. District Judge Vernon S. Broderick, is 1:24-cv-09918, Goldeneye Advisors, LLC v. Hanaco Venture Capital, Ltd. et al.
Who Got The Work
Attorneys from A&O Shearman has stepped in as defense counsel for Toronto-Dominion Bank and other defendants in a pending securities class action. The suit, filed Dec. 11 in New York Southern District Court by Bleichmar Fonti & Auld, accuses the defendants of concealing the bank's 'pervasive' deficiencies in regards to its compliance with the Bank Secrecy Act and the quality of its anti-money laundering controls. The case, assigned to U.S. District Judge Arun Subramanian, is 1:24-cv-09445, Gonzalez v. The Toronto-Dominion Bank et al.
Who Got The Work
Crown Castle International, a Pennsylvania company providing shared communications infrastructure, has turned to Luke D. Wolf of Gordon Rees Scully Mansukhani to fend off a pending breach-of-contract lawsuit. The court action, filed Nov. 25 in Michigan Eastern District Court by Hooper Hathaway PC on behalf of The Town Residences LLC, accuses Crown Castle of failing to transfer approximately $30,000 in utility payments from T-Mobile in breach of a roof-top lease and assignment agreement. The case, assigned to U.S. District Judge Susan K. Declercq, is 2:24-cv-13131, The Town Residences LLC v. T-Mobile US, Inc. et al.
Who Got The Work
Wilfred P. Coronato and Daniel M. Schwartz of McCarter & English have stepped in as defense counsel to Electrolux Home Products Inc. in a pending product liability lawsuit. The court action, filed Nov. 26 in New York Eastern District Court by Poulos Lopiccolo PC and Nagel Rice LLP on behalf of David Stern, alleges that the defendant's refrigerators’ drawers and shelving repeatedly break and fall apart within months after purchase. The case, assigned to U.S. District Judge Joan M. Azrack, is 2:24-cv-08204, Stern v. Electrolux Home Products, Inc.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250