Florida Gov. Ron DeSantis once was credited with boosting the medical cannabis program by championing the addition of flower products, but now he appears to be taking a more nuanced approach to expanding the program.
Two weeks ago, the governor vetoed a bill that would have banned intoxicating hemp products sold in smoke shops and convenience stores, in part because of his opposition to Amendment 3, which would legalize recreational cannabis for adults 21 and older.
“The marijuana industry was supporting this hemp bill,” DeSantis said at a press conference last week. “They wanted to curtail that industry, and then they want to be able to get this Amendment 3 passed.”
Meanwhile, he signed a Department of Health law that could grant at least three additional medical marijuana licenses to Black farmers. The legislation, set to take effect July 1, builds on last year’s efforts to increase licenses for Black farmers and establishes a 90-day “cure” period for rejected applications meeting certain criteria.
The efforts stem from a 2017 law mandating a license for a Black farmer with ties to the Pigford litigation, a series of class action lawsuits over discriminatory lending practices by the U.S. Department of Agriculture. The latest bid also comes amid new findings about land given to Black farmers after the Civil War.
The cannabis industry’s relationship with DeSantis has been complex, and at times, controversial. A CNN investigation last year ran down the governor’s connections to key figures in the industry, including Rep. Matt Gaetz, who was instrumental in Florida’s first medical marijuana law. The report also highlighted that DeSantis attended a private fundraiser hosted by Dr. Jason Pirozzolo, who has ties to the medical marijuana industry.
Upon taking office, DeSantis quickly moved to legalize smokable medical marijuana, surprising many in Florida political circles. He initially criticized the state’s vertical integration system as a “cartel,” but his administration later defended it in court.
More recently, however, DeSantis launched the “Florida Freedom Fund” political action committee to campaign against Amendment 3, arguing it would lead to widespread public consumption and negatively impact quality of life. Attorney General Ashley Moody already tried to defeat the ballot measure in court earlier this year, but that effort failed.
If the ballot initiative passes, adult-use sales could begin six months after the vote, pending legislative rulemaking.
Pool full of money?
Legalization of adult-use cannabis would likely open the door to significant opportunities for operators in the state, but the economic projections vary widely. State analysts estimate annual tax revenues between $195.6 million and $431.3 million, while BDSA projects nearly $900 million in adult-use sales by 2025, with potential total cannabis sales reaching $4.5 billion by 2028.
What it is also likely to do is increase the number of operators in the state, fanning concerns about licensing dilution that have been a recurring issue in Florida’s cannabis industry since its inception. The state’s initial approach to licensing was highly restrictive, with only a handful of vertically integrated licenses granted under the 2014 Compassionate Medical Cannabis Act.
When Florida voters approved a broader medical marijuana program in 2016, the state maintained its limited licensing structure. That led to legal challenges from companies that were denied licenses, arguing the system was unconstitutional.
By 2022, the state raised license renewal fees from $60,000 to over $1 million, making it the most expensive to enter at the time.
Last year, Florida expanded its licensing program, offering 22 new licenses through a competitive application process. That marked the first significant increase in licenses since 2017, with non-Pigford applicants paying a nonrefundable $146,000 application fee. That’s before the millions that companies must pony up after receiving approval.
Industry insiders have expressed worries that increasing the number of licenses could devalue existing operations, which have invested heavily in the vertically integrated model required by the state. Some argue that the high application and renewal fees were justified by the limited number of licenses, and that dilution could threaten the financial viability of current operators.
Still, advocates for increased licensing argue that more competition could lower prices for patients and increase product variety. They also contend that the current system has created an oligopoly that limits patient access and market innovation.
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