James Call
With a little luck, a cannabis-based medicine may be available in Florida by the end of the year – even if the rule developed during two days of negotiations is challenged. Patricia Nelson, director of the state Office of Compassionate Use, navigated a 12-member panel of stakeholders through a thicket of regulatory issues caused by conflicts between state and federal laws to produce what the group hopes is a challenge-proof rule.
The panel negotiated 25 hours this week to develop a regulatory structure for a medicinal marijuana industry. Nelson assembled the group of growers, patient advocates and legal and medical professionals after the state lost a lawsuit over its first proposed rule to allow marijuana to be cultivated for treatment of children afflicted with severe epilepsy.
The panel developed a scorecard to evaluate applicants for the five licenses lawmakers authorized to grow marijuana and dispense cannabis-based medicine.
The panel also set a timetable for licensees to begin providing the medicinal oil, but failed to find a way to shield nurseries from federal banking regulations concerning illegal drugs. Nelson would not agree to allow a licensed nursery separate its business relationship from a dispensing entity.
The issue may invite a challenge.
“It’s an area where people have very strong feelings about one way or another and people will do what they can to get the results they desire,” Nelson said “And if that result is not these rules then I think people will probably look at every avenue to prevent these rules from becoming effective.”
An administrative judge invalidated a regulatory structure in November because it used a lottery to award licenses. The panel instead developed a scorecard to evaluate applicants on their ability to cultivate, process and dispense. Growers also will be scored on their financial capability and how they set up the medical director’s office.
Nelson urged the group to weigh each component of the five categories to avoid accusations the regulatory scheme was arbitrary and capricious.
Cultivation will compose 30 percent of an applicant’s overall score, processing another 30 percent, financial 20 percent, 15 percent for dispensing and another 5 percent for medical director. Each category will be measured on four components: the applicant’s technical ability, infrastructure, personnel resources and accountability measures.
The panel developed the scoring system with an eye to avoid having to send the rule to the legislature for ratification. It seeks to keep regulatory costs down by not mandating requirements but enabling applicants to boost their overall score by voluntarily implementing procedures to meet regulators’ goals.
“We’ve taken a lot of stuff out of rule and put in a scorecard, and that changes what is required of you,” said Joel Stanley, a Colorado Charlotte’s Web distributor. “You can still spend that money if you want to put in a good application but you are not required to by the department. So the cost is down significantly.”
Nelson said she is not trying to avoid the ratification process and thinks there’s a “50-50 chance” regulatory costs will not reach the threshold triggering the need for legislative approval.
Once a license is approved the grower will have 105 days to set up an operation and begin cultivation. Growers then successfully extended the deadline to harvest and process oil for dispensing. Nelson had proposed a five-month deadline but growers wanted at least seven months saying, nature moves at its own pace.
“I need you to go on the record as to how we got to 210 days,” Nelson said, telling the group she wanted a rule that will survive challenge. “We must be able to defend it.”
Growers said plants require at least 56 days of vegetation in order to flower. Then another 72 days to mature to harvesting. At least another 28 days then are needed to process oil: a total of 184 days under ideal conditions. They asked for an additional 26 days as a buffer and Nelson agreed.
The nurseries lost an extended discussion about allowing common ownership of an eligible nursery and dispensing organization — a way to avoid banking and insurance problems created by conflicts between state and federal laws that they say places their entire business at risk.
Nelson protested that such a maneuver would risk a challenge she was convinced the department would lose. An administrative law judge ruled in November that the plain language of the statute qualified only a nursery to hold a license to grow and dispense a cannabis product.
“It is in no nursery’s interest to challenge that rule because every nursery benefits from it,” said Pedro Freyer of Costa Farms, the state’s largest nursery, arguing Nelson’s fear was unfounded.
“You’re offering on a premise that is not accurate. I have e-mails that say I personally know 10 others that are not worried about the banking situation,” Nelson said.
Nelson and Donna Blanton, a legal representative on the committee, said the judge had clearly invalidated such a scheme in the ruling that threw out the first rule.
“Plus the agency does not encourage me to do something that I feel is not legal,” Nelson said. “I cannot fix what is a conundrum by doing something that is invalid. I cannot do it.”
Nelson’s intent is to publish a rule as quickly as possible, perhaps as soon as Monday, to start a 21-day comment period providing for public review and challenges to be filed.
