1. Lottery 

Despite significant criticism of the lottery in the first workshop, the DOH continues to rely on a lottery in the second draft of the regulations. There are two reasons for this. First, DOH hopes to minimize challenges to the final licensees. They are concerned that, if the licenses are awarded after a technical review and competition, the losers will immediately challenge the awards, claiming that the DOH made a technically bad decision. Second, a lottery is much faster than a full review of applications. 

At the first workshop, there were widespread objections raised that a lottery could award a license to an unqualified applicant. To address that concern, in the second draft of the regulations, DOH proposes to review the applications before the lottery and to disqualify unqualified applicants from participating in the lottery. But, at the end of the process, DOH will rely on a lottery. 

At the August 1st workshop, a few speakers acknowledged that the lottery process was improved. However most speakers still had major concerns. There were three reasons given: 

First, there were emotional arguments by patient's groups -- "we want our drugs prepared by the best applicants, not the luckiest." 

Second, despite DOH's desire to avoid challenges, in the new process DOH will certify applicants before they are entered into the lottery. Several speakers said challenges would arise if applicants are not certified to be in the lottery. Thus, the challenges are just earlier in the process. 

Third, a legal argument was made that the lottery is not allowed by the Charlotte's Web law. In other instances where the State has a lottery process to award licenses, the lottery is specifically authorized by law. In the Charlotte's Web law, the statute directed the DOH to use its expertise and discretion to award the licenses. The point was made that a lottery does not rely on any expertise. 

Comments: It is clear that if the lottery remains in the final rule it will be challenged in court.

  1. Where Can Applicants Apply 

There were questions raised about where the applicants can apply. For example, can a grower in Southeast Florida, where there may be 20 qualified applicants, apply for a license in Central Florida, where there may be less competition. DOH did not have an answer. 

  1. Multiple Facilities 

DOH stated that each of the five licensees can distribute medical marijuana throughout the State. This was included in the second draft in response to comments at the first workshop urging DOH to avoid the existence of five exclusive monopolies. But it is still unclear if licensees can distribute through satellite facilities. The second draft regulations are very confusing on this point. At some places in the regulations there are references to a licensee's facility in others to a licensee's facilities. In another place, the regulations allows licensees to, with DOH approval, "alter, expand, or consolidate their infrastructure, operations or staking"…Yet, when asked at the workshop, DOH did not say that the regulations would allow multiple distribution sites. 

As an alternative, the regulations will now allow each licensee to transport and deliver drugs. The speakers did not find this to be an acceptable alternative. 

Comments: DOH is moving in the right direction but this needs to be clarified. It remains impracticable to limit a license to one location. 

  1. Transportation 

As stated above, the second draft regulations allow licensees to deliver to patients. DOH said they expect the deliveries to be made by employees. 

This idea has many practical problems. First, there are legitimate concerns for the safety of drivers, who will be carrying large amounts of drugs and large amounts of cash. Second, to cover the State from one location, each licensee will need a large number of trucks and drivers. Yet, even with a big fleet, there will be times when patients will have to wait for their drugs. Finally, who will pay for this fleet? Will there be one price at the licensee's facility and a higher delivery price? DOH did not have answers for these questions. 

  1. Organic 

The second draft now requires that the marijuana be grown and processed organically. The speakers pointed out that there are many definitions of organic and some allow the use of pesticides. DOH was unable to answer specific questions about this topic. 

  1. Duration of License 

The regulations give the initial license for two years. Given the extensive investments that will be needed to establish the distribution enterprises, several speakers urged DOH to allow the licenses to continue for up to five years. 

  1. Pharmacists 

A number of speakers urged DOH to require that the drugs be distributed by pharmacists. Other speakers believe this is a needless cost, particularly since doctors must also be employed to develop procedures and protocols. 

  1. Residence 

The regulations defines residents and only permits the drugs to be distributed to Florida residences. This is in the law. However, some speakers were concerned about long term visitors, like snowbirds, who would be barred from purchasing the marijuana. 

  1. Audits 

The first draft required licensees to submit audited financial statements from a CPA. The second draft does not require an audit. The speakers were equally divided on this. Some growers do not want to pay for a full audit and support the new version. Other more sophisticated growers say that audited financials are acceptable. Some patients' groups want the audits to make sure the applicants are the most qualified.