Commercial cultivation, retail and marketing
Business licensing requirements
What licensing requirements apply to businesses seeking to cultivate, distribute, produce and sell cannabis products in your jurisdiction? What procedures, timeframes and fees apply in this regard, and on what grounds can a licence be revoked?
Florida strictly limits the number of companies that can supply medical cannabis. To do so, a company must obtain a license to operate as a medical marijuana treatment center (Florida Statute 381.986(8)). Medical marijuana treatment centers are vertically-integrated companies that cultivate, process, and dispense cannabis.
The statute that implements the constitutional amendment that permits medical cannabis— Florida Statute 381.986—initially provided for 10 medical marijuana treatment center licenses (Florida Statute 381.986(8)(a)(2)(c)). Four additional licenses will be issued each time 100,000 additional qualified patients are added to Florida’s medical marijuana use registry (Florida Statute 381.986(8)(a)(4)). There are currently 14 licensed medical marijuana treatment centers. No individual or entity can obtain more than one medical marijuana treatment center license (Florida Statute 381.986(8)(b)).
To obtain a medical marijuana treatment center license, the applicant must submit to the Florida Department of Health a non-refundable application fee (in the amount of $60,830 under proposed rule 64-4.002) and a detailed application, which is then blind-graded and scored against other applicants to determine who receives the limited licenses. Broadly speaking, Florida Statute 381.986 requires that an applicant has:
- been registered to do business in Florida for five consecutive years;
- the “technical and technological ability” to cultivate cannabis, including low-tetrahydrocannabinol cannabis;
- the ability to comply with the statute’s security requirements and “prevent diversion or unlawful access” to cannabis;
- the infrastructure to dispense cannabis;
- the financial ability to maintain its operations;
- a medical director, who is a licensed allopathic or osteopathic physician, to supervise its activities; and
- a “diversity plan that promotes and ensures the involvement of minority persons and minority business enterprises [or] veteran business enterprises… in ownership, management, and employment” (Florida Statute 381.986(8)(b)).
The applicant must also show that all of its “owners, officers, board members, and managers have passed a background screening” pursuant to Florida Statute 381.986(9).
If the applicant is awarded a license, it must post bond or provide an irrevocable letter of credit in the amount of $5 million or, if it will serve at least 1,000 qualified patients, $2 million (Florida Statute 381.986(8)(b)(7)). Licenses expire after two years but may be renewed biennially if the medical marijuana treatment center maintains compliance with Florida Statute 381.986 and pays a renewal fee (Florida Statute 381.986(8)(b)).
Florida Statute 381.986 provides that a medical marijuana treatment center license can be revoked for 13 enumerated reasons, which includes, as a catch-all, any violation of the statute or rule promulgated by the Department of Health (Florida Statute 381.986(10(f)). The Department of Health has also promulgated Florida Administrative Code 64ER17-6, which includes a detailed list of specific violations and the penalties for each. Under the rule, “[p]enalties are applicable per instance of each violation and every day that a violation occurs shall be considered a separate violation” (Id.).
Are any businesses specifically prohibited from selling cannabis products?
Only licensed medical marijuana treatment centers are allowed to sell cannabis in Florida.
Zoning and real estate considerations
Are there any zoning restrictions on where businesses can cultivate, produce and sell cannabis products?
Florida law provides few state-wide zoning restrictions on cannabis companies, and provides counties and municipalities with the option to:
- ban cannabis dispensaries from the county or municipality entirely; or
- allow cannabis dispensaries in the jurisdiction, subject to zoning laws no more restrictive than those that apply to pharmacies (Florida Statute 381.986(11)).
Counties and municipalities can neither ban nor regulate the location of cultivation and processing facilities in their jurisdiction (Id.).
Statewide, no cannabis cultivation or processing facility can be located within 500 feet of any elementary, middle, or secondary school (Florida Statute 381.986(11)(a)). Dispensing facilities are subject to the same restriction unless the county or municipality in which they are located approves the near-school location through a formal, public proceeding at which the county or municipality “determines that the location promotes the public health, safety, and general welfare of the community” (Florida Statute 381.986(11)(b)).
Counties and municipalities have the option of banning marijuana dispensaries from their jurisdiction entirely (Florida Statute 381.986(11)(b)(1)). However, in the absence of such a ban, the county or municipality cannot enact ordinances limiting the number of dispensaries in the jurisdiction (Id.). Further, it cannot enact permitting or location ordinances that are more restrictive than the jurisdiction’s ordinances for pharmacies (Florida Statute 381.986(11)(b)(2)).
Are there any other notable real estate issues pertinent to cannabis businesses, including with regard to landlord/tenant relationships and real estate market activity?
Medical marijuana treatment centers cannot enter into any profit-sharing arrangements with the owner or lessor of the facilities in which the company cultivates, processes, stores, or dispenses cannabis (Florida Statute 381.986(8)(e)(3)). Medical marijuana treatment centers must grow and process cannabis within an enclosed structure, and the cannabis must be grown and processed in rooms that are separate from any other plants or products (Florida Statute 381.986(8)(e)). Florida also requires that medical marijuana treatment centers maintain a robust security system that includes:
- an alarm system;
- a video surveillance system; and
- a locked room or vault to store cannabis (Florida Statute 381.986(8)(f)).
A medical marijuana treatment center’s dispensing facility—where qualified patients can purchase cannabis—must include a waiting area and a private consultation area that is separate from the waiting area and the “area where dispensing occurs” (Florida Statute 381.986(8)(f)(3)). A medical marijuana treatment center cannot display products or dispense cannabis in the waiting area (Id.).
Product restrictions and specifications
Are any cannabis products and accessories prohibited from sale? Do any product specifications apply?
While the statute implementing the medical cannabis amendment to Florida’s Constitution (the Cannabis Amendment) contains specific restrictions regarding the forms of cannabis and accessories available for sale, the validity of those restrictions is in question after they were struck down as unconstitutional by a Florida trial court in May 2018.
The Cannabis Amendment defines “marijuana” as:
[A]ll parts of any plant of the genus Cannabis, whether growing or not; the seeds thereof; the resin extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant or its seeds or resin. (Article X, Section 29(b)(4) of the Florida Constitution).
The amendment also states that it “shall not require any accommodation… of smoking medical marijuana in any public place,” which could be read as implying a right to smoke medical cannabis in private (Article X, Section 29(c)(6) of the Florida Constitution).
However, the statute implementing the Cannabis Amendment prohibits cannabis companies from selling cannabis flower “in a form for smoking”—although they may sell cannabis “flower in a sealed, tamper-proof receptacle for vaping” (Florida Statute 381.986(1)(j)(2)). This prohibition on the sale of cannabis flower was struck down as unconstitutional by a Florida trial court on May 25, 2018 (People United for Med. Marijuana v. Florida Dept. of Health, Case 17-001394, 2018 WL 2447102 (Florida Circuit Court, May 25, 2018)). The Florida Department of Health appealed the decision, and the trial court’s judgment is stayed while the appeal is pending.
The statute allows cannabis companies to sell edibles that are “made with marijuana oil” (Florida Statute 381.986(1)(d)). However, edibles cannot be made with any “other form of marijuana” (Id.).
The statute also limits the accessories that can be used to consume cannabis—so-called “marijuana delivery devices” (Florida Statute 381.986(1)(g)). Each physician certification for the use of medical cannabis issued to a qualified patient specifies the marijuana delivery device that the patient must use to consume the prescribed cannabis (Florida Statute 381.986(4)(a)(7)(a)). Cannabis companies are prohibited from selling any “drug-related product, including pipes, bongs, or wrapping papers,” other than a marijuana delivery device specified in a physician certification (Florida Administrative Code, r 64ER 17-6(1)(b)(7)).
Packaging and labelling
What packaging and labelling requirements apply to the sale and distribution of cannabis products and accessories?
Cannabis products must be affixed with a label stating the following information:
- the product met the testing requirements of Florida Statute 381.986(8)(e)(10)(d);
- the name of the medical marijuana treatment center from which it originates;
- the batch and harvest number;
- the date dispensed;
- the name of the physician who issued the physician certification authorizing the patient’s purchase;
- the patient’s name;
- the product name, if any;
- a dosage form listing the concentration of tetrahydrocannabinol and cannabidiol;
- the recommended dose;
- a warning that it is illegal to give the cannabis to another person; and
- a “marijuana universal symbol” developed by the Florida Department of Health (Florida Statute 381.986(8)(e)(10)(e)).
A “patient package insert” must be placed inside the cannabis product’s package that includes information related to the product’s:
- clinical pharmacology;
- indications and use;
- dosage and administration;
- dosage forms and strength;
- warnings and precautions; and
- adverse reactions (Florida Statute 381.986(8)(e)(11)).
If the product comprises edibles, each edible within the package must be individually wrapped in “plain, opaque wrapping marked only with the marijuana universal symbol” developed by the Department of Health (Florida Statute 381.986(8)(e)(12)). Edibles cannot:
[B]e attractive to children; be manufactured in the shape of humans, cartoons, or animals; be manufactured in a form that bears any reasonable resemblance to products available for consumption as commercially available candy; or contain any color additives. (Florida Statute 381.986(8)(e).)
After purchase, the customer must keep the cannabis in its original packaging at all times (Florida Statute 381.986(14)(a)).
Advertising and marketing
What rules and restrictions govern the advertising and marketing of cannabis products and accessories (including online)?
Florida law severely restricts the advertising of cannabis products. The only non-digital marketing allowed is a sign “affixed to the outside or hanging in a window” of a dispensary which includes the dispensary’s approved trade name or logo (Florida Statute 381.986(8)(h)(1)). All other “advertising that is visible to members of the public from any street, sidewalk, park, or other public place” is prohibited (Florida Statute 381.986(8)(h)).
All digital advertisements must be approved by the Florida Department of Health (Florida Statute 381.986(8)(h)(2)(a)). Unsolicited pop-up advertisements are expressly prohibited, and all opt-in marketing must include “an easy and permanent opt-out feature” (Florida Statute 381.986(8)(h)(2)(c-d)). Whether digital or non-digital, cannabis advertising cannot specifically target minors (Florida Statute 381.986(8)(h)).
Cannabis companies must maintain a website (Florida Statute 381.986(8)(i)). The website must include:
- each product offered;
- the price for a 30, 50, and 70-day supply of each product;
- the price for each marijuana delivery device offered; and
- any discount policies and eligibility requirements, if applicable (Id.).
What rules and restrictions govern the branding and trademarking of cannabis products and accessories? Are there any other special branding considerations for cannabis businesses?
Florida’s medical cannabis statute does not contain any specific provisions related to the branding and trademarking of cannabis products and accessories.