throbber
Filing # 113142688 E-Filed 09/10/2020 11:44:39 AM
`
`
`SC19-1464
`
`IN THE SUPREME COURT OF FLORIDA
`__________________________________________________
`
`FLORIDA DEPARTMENT OF HEALTH,
`OFFICE OF MEDICAL MARIJUANA USE, et al.
`
`Petitioners,
`
`v.
`
`FLORIGROWN, LLC
`a Florida Limited Liability Company, and
`VOICE OF FREEDOM, INC. d/b/a FLORIGROWN
`
`Respondents.
`__________________________________________________________________
`
`BRIEF OF AMICUS CURIAE
`TRIANGLE CAPITAL, INC,
`IN SUPPORT OF RESPONDENTS
`__________________________________________________________________
`
`Jeff Kottkamp
`Florida Bar No. 771295
`Jeff Kottkamp, P.A.
`3311 Dartmoor Drive
`Tallahassee, FL. 323212
`(239) 297-9741
`JeffKottkamp@gmail.com
`
`Counsel for Triangle Capital, Inc.
`
` i
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`RECEIVED, 09/10/2020 11:45:33 AM, Clerk, Supreme Court
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`TABLE OF CONTENTS
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` PAGE
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`TABLE OF CITATIONS…………………………………………...….iii
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`STATEMENT OF INTEREST……………………………………….....1
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`SUMMARY OF ARGUMENT…………………………………………3
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`ARGUMENT……………………………………………………………4
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`CONCLUSION…………………………………………………..…….20
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`TABLE OF CITATIONS
`Cases Page(s)
`Cramp v. Board of Public Instruction of Orange County, 16-17
`137 So.2d 828 (Fla.1962)
`George Hackney, Inc. d/b/a Trulieve v. Florida
`
`Department of Health, 2nd Judicial Circuit (Case No. 2018 CA 0698) 16
`
`Homestead Hosp., Inc. v. Miami-Dade County, 17
`829 So.2d 259 (Fla. App. 2002)
`Lawnwood Medical Center, Inc. v. Seeger, 990 So.2d 503 (Fla. 2008) 14-15
`Myers v. Hawkins, 362 So.2d 926, 930 (Fla. 1978) 15
`Richardson v. Richardson, 766 So.2d 1036, 1041 (Fla.2000) 17
`Venice HMA, LLC v. Sarasota Cnty., 228 So.3d 76 (Fla. 2017) 15
`
`Constitutional Provisions
`Article III Section 11 (a)(12) 3
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`Article X Section 29 9
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`Article XI Section 5 (e) 10
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`Statutes
`Florida Statute 381.986 3,11
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`Florida Statute 381.986(8) 4,14,16,19
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`Other Sources
`www.MyFloridaHouse.Gov 4
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`www.FLSenate.Gov 4
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`www.KnowtheFactsMMJ.com 7
`
`www.News-Press.com 7
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`www.OrlandoWeekly.com 13
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`STATEMENT OF INTEREST IN THE CASE
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` Triangle Capital, Inc. is a Florida Corporation which has been registered to do
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`business in Florida for at least five consecutive years. On or about February 15,
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`2019 Triangle Capital, Inc. submitted a Request for Registration to the Florida
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`Department of Health, Office of Medical Marijuana Use specifically requesting
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`that they be registered to operate a Medical Marijuana Treatment Center.
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` In their Request for Registration Triangle specifically noted they:
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` a. Will meet any safety standard required for security, inventory and control
`including the use of video surveillance, alarms and physical barrier to control
`access to their facilities;
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` b. Will comply with any record keeping requirements for inventory control,
`tracking and chain of custody, and will use software that can be audited by an
`independent third party;
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` c. Will comply with testing requirements for medical marijuana including
`internal testing and maintaining batch samples for auditing and/or testing by an
`independent third party;
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` d. Will maintain records necessary to meet any standard for labeling of products
`including lists of ingredients and THC content, as well as any necessary product
`safety warnings;
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` e. Will make its facilities, processes and records available for inspection by the
`appropriate government entity;
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` f. Will consider the safety of its products and the well-being of patients to be a
`paramount concern;
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` g. Will satisfy and exceed any safety requirement established by the State of
`Florida;
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` h. Will satisfy any zoning requirements of the jurisdictions in which it will
`operate facilities;
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` i. Will hire and maintain a professional staff including a Medical Director that
`advances their core principle of patient safety.
`
` j. Triangle principles have an eleven-year track record in the medical marijuana
`business in other states (holding 9 licenses in Colorado as “Green Medicine LLC”
`and 3 vertical licenses in Arizona doing business as “Territory Dispensaries”) and
`the financial ability to successfully operate a Medical Marijuana Treatment Center
`in Florida. In addition, they are prepared to immediately tender a check for
`$60,830 to the State of Florida as a registration fee.
`
` After the Office of Medical Marijuana Use failed to respond, or even
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`acknowledge, Triangle’s Request for Registration, Triangle Capital, Inc. filed a
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`Motion to Intervene in the underlying action filed in Circuit Court by Respondent
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`Florigrown, LLC against Petitioners. The Court granted the motion and thereafter
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`Triangle Capital, Inc. filed a Complaint which closely mirrors the Complaint filed
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`by Florigrown, LLC.
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` Like many of the Intervenors in the action, Triangle Capital, Inc. has invested
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`significant financial resources toward their effort to enter the medical marijuana
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`industry in Florida in reliance on the passage and wording of the medical
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`marijuana constitutional amendment. Triangle Capital, Inc. has a direct interest in
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`the outcome of this matter and knows from experience in other states that creating
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`competition in the medical marijuana market in Florida will benefit patients by
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`expanding the assortment of medical marijuana products and increase the available
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`supply of medical marijuana products, which will in turn lower prices.
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`Summary of Argument
` The Court has asked a very important question. Is the statute regulating
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`medical marijuana in Florida (more specifically F.S. 381.986) a “Special Law” that
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`grants a privilege to a private corporation? Put another way---is the current law
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`regulating medical marijuana an example of giving an advantage, special privilege
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`or special treatment to a select few private corporations.
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`
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` The idea of using Florida law to grant special privilege to a private corporation
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`is so contrary to the values of the citizens of Florida that such actions are
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`prohibited in Article III Section 11 (a)(12) of the Florida Constitution. Thus, it is a
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`fundamental value of the citizens of Florida that the Legislature abstain from
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`granting favors to private companies or otherwise practicing what has come to be
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`known as “crony capitalism”.
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`
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` Unfortunately, to date every medical marijuana treatment center license that has
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`been awarded by the Florida Department of Health has been a grant of a special
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`privilege to a select few private corporation in direct contravention of the Florida’s
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`Constitution.
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`ARGUMENT
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`How it all started
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` To fully understand the extent to which the Legislature violated the Constitution
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`when they enacted Florida Statute 381.986(8), you must go back to the 2014
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`Legislative Session. During that Session, a bill was introduced in the Florida
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`House of Representatives (HB 843)1 and in the Florida Senate (SB 1030)2 that
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`authorized the “compassionate use” of low-THC medical marijuana. The
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`legislation was allegedly filed in response to claims that certain types of low-THC
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`medical marijuana provided relief to some children with seizure disorders.
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`
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` House Bill 843 was filed on February 6, 2014. It was originally a two-page bill
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`that redefined the term “cannabis” in Florida law. The bill was heard in three
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`House committees. In the last committee stop on April 21, 2014 a 13-page strike-
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`all amendment3 was adopted by the House Judiciary Committee that dramatically
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`changed the bill. Among other things, the amendment directed to the Department
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`of Health to authorize the establishment of a medical marijuana dispensing
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`1 https://www.myfloridahouse.gov/Sections/Bills/billsdetail.aspx?BillId=51982&SessionId=75
`2 https://www.flsenate.gov/Session/Bill/2014/1030
`3
`https://www.myfloridahouse.gov/Sections/Documents/loaddoc.aspx?FileName=_h0843c2.docx&DocumentType=
`Bill&BillNumber=0843&Session=2014
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`organization in four regions of the state. The amended bill was sent to the House
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`floor for consideration.
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`
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` Senate Bill 1030 was filed on February 12, 2014. It was a six-page bill that
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`allowed for the use of low-THC medical marijuana. The bill directed the
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`Department of Health to authorize between one and four dispensing organizations
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`statewide to ensure reasonable accessibility and availability of low-THC medical
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`marijuana for patients. The bill was approved by three Senate committees and then
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`sent to the Senate floor where it passed on 4/28/14.
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`
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` The Senate bill was received in Messages by the Florida House. The Senate bill
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`was then substituted and considered in lieu of the House bill. The night before the
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`Legislative Session ended, on May 1, 2014 at 7:57 p.m., the House filed a 15-page
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`strike-all amendment to the Senate bill. This is a highly unusual approach. Both
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`the House and Senate have rules to prevent late-filed amendments that circumvent
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`the legislative process. It was at this point that the Legislature originally
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`considered granting a special privilege to private corporations.
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`
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` The strike-all amendment directed the Department of Health to establish five
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`dispensing organizations in Florida and created a special closed class of authorized
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`dispensing organizations by limiting applicants to registered nurseries that had
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`operated continuously in Florida for 30 years, who were registered with the
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`Department of Agriculture and Consumer Services to cultivate 400,000 or more
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`plants, and who were operated by a nurseryman as defined in Florida law.
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`
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` This was the first time the Legislature considered the concept of narrowing the
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`class of potential applicants for a license to a privileged class of Florida nurseries
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`who had operated continuously for 30 or more years who were registered to
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`cultivate 400,000 or more plants. The idea was never considered in one committee
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`in the House or Senate. No public testimony or evidence was ever presented to the
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`Legislature to establish a nexus between the creation of such a narrowly tailored
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`special class and the Legislature’s stated goal of ensuring reasonable accessibility
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`and availability of low-THC medical marijuana for patients.
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`
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` Later, on the night of May 1, 2014, the strike-all amendment was adopted by
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`the House, the amended bill was passed and sent back to the Senate in Messages.
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`The next day---the last day of the 2014 Legislative Session---the Senate took up
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`the bill in returning Messages. The Senate concurred in the House strike-all
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`amendment and the bill was passed. On June 16, 2014 Governor Rick Scott signed
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`the bill known as the “Compassionate Medical Cannabis Act” into law.
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` The effect of severely restricting who could apply to be a dispensing
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`organization to a special closed class of Florida nurseries who had operated for 30
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`continuous years, and who were registered to cultivate 400,000+ plants, was
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`immediate. Any out-of-state company that actually had experience with growing,
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`processing and dispensing medical marijuana was immediately shut out of the
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`process. Since growing marijuana in Florida was illegal at the time---it could not
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`be said that any in-state company or organization had successfully grown and sold
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`marijuana crops in our state---let alone nurseries that typically grow trees, shrubs
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`and flowers. In addition, many Florida nurseries that were shut out of the
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`application process by the criteria believed the restrictions were “arbitrary and
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`unfair”.4
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`
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` After the low-THC bill became law the Department of Health began the process
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`of accepting applications for the five dispensing licenses permitted by the law. A
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`total of 24 different companies applied for a low-THC medical marijuana
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`dispensing license on July 8, 20155. Two of the applicants were disqualified
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`leaving 22 applicants for consideration. Ultimately, the five available licenses
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`were awarded to George Hackney, Inc. d/b/a Hackney Nursery (now known as
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`4 https://www.news-press.com/story/news/2014/05/19/growing-medical-pot-picnic/9310269/
`5 https://knowthefactsmmj.com/wp-content/uploads/_documents/dispensing-organization-applicants.pdf
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`Trulieve), Alpha Foliage, Inc. (now known as Surterra Wellness), Costa Nursery
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`(now known as Curaleaf), Knox Nursery (now known as Fluent), and Chestnut
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`Tree Farm (now known as Liberty Health Sciences). The applicants that did not
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`receive a license challenged the decision of the Department of Health in series of
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`administrative Complaints and civil actions. Over the course of the next several
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`years the Department of Health settled most of the challenges by giving away
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`licenses.
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` Today—22 licenses have been awarded---the exact number of qualified
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`applicants for low-THC licenses. Six years after the initial low-THC bill was
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`passed, one Constitutional amendment, and one implementing statute later—the
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`only companies to be awarded a license to sell any form of medical marijuana by
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`the Florida Department of Health are the companies who fell in to the special class
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`created by the Legislature in 2014 and who applied to sell low-THC medical
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`marijuana.
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`The Legislature expands to full-blown medical marijuana
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` During the 2015, the Florida Legislature passed legislation to authorize
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`dispensing organizations to dispense full-blown medical marijuana in addition to
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`low-THC medical marijuana. Sale of medical marijuana was limited to qualified
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`patients diagnosed with a terminal condition. The legislation essentially
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`“grandfathered” the licenses of all companies that have previously been awarded a
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`low-THC dispensing license from the Department of Health. None of the low-
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`THC license holders were required to submit new applications to demonstrate their
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`ability to cultivate, process and dispense medical marijuana containing THC.
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`
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` The legislation also authorized three additional licenses to dispense medical
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`marijuana after 250,000 active qualified patients registered to use medical
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`marijuana. The legislation left intact the requirement that a dispensing organization
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`operate as a nursery in Florida for 30 continuous years and be registered with the
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`Florida Department of Agriculture and Consumer Services to cultivate 400,000 or
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`more plants.
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`The Voters Respond
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` Apparently unhappy with the medical marijuana scheme established by the
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`Legislature, 71% of the voters in Florida passed a Constitutional Amendment on
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`November 8, 2016 which established a new regulatory system for medical
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`marijuana. The Amendment became Article X Section 29 of the Florida
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`Constitution.
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` As has been argued extensively in this appeal—the Constitutional Amendment
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`appears to establish a very different regulatory system for medical marijuana in
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`Florida. The Amendment directed the Department of Health to begin registering
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`new medical marijuana treatment centers within 9 months of the effective date of
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`the Amendment. Because the Amendment did not contain a specific effective date,
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`pursuant to Article XI Section 5.e. of the Florida Constitution, the Amendment
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`became effective on January 3, 2017. Thus, the Department was constitutionally
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`directed to register new medical marijuana treatment centers by October 3, 2017.
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`Now nearly three years later the Department has failed to comply.
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`The Legislature Ignores the Voters
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` The Constitutional amendment passed by the voters of Florida provided the
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`Legislature with some very specific parameters. The Amendment calls for a
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`registration process for medical marijuana treatment centers—as opposed to an
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`application process. The difference is worth noting. A registration process allows
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`someone to obtain a license if they meet certain minimum standards. An
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`application process requires companies to compete against each other---with the
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`State picking winners and losers.
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`
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` The Amendment also makes it clear that a company that registers with the
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`Department of Health can choose to grow, process OR sell medical marijuana.
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`This is a big change since it shifts Florida’s medical marijuana regulatory system
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`from a vertically integrated only system to a hybrid system that affords the
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`registered license holder the option of operating a vertical or horizontal business.
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`
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` Following the passage of the Amendment the Florida Legislature took aim at
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`passing legislation to implement the Constitutional Amendment. They failed to
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`pass legislation during the 2017 Regular Session---but did pass legislation during a
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`Special Session later that year.
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`
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` The bill the Legislature passed, SB 8A, essentially ignored the will of the voters
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`of Florida. The 78-page bill, which was ultimately passed and became law,
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`amends F.S. 381.986 and again grandfathered any previously issued license to a
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`company to grow, process, transport and dispense low-THC medical marijuana. In
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`other words—the special privilege awarded to a select group of 30-year nurseries
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`licensed to cultivate 400,000 or more plants was protected. The legislation also
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`gave the Department of Health the authority to issue “variances” related to any
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`representations made by the low-THC license holders in their initial applications.
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`Thus, the low-THC license applicants not only had their license grandfathered---
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`they were given the opportunity to apply for variances from any MMTC
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`regulations that would apply to new MMTCs. This represents another special
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`privilege to a select group of private corporations.
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` The legislation directed the Department to issue 10 additional licenses. The
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`new statute specifically provided for an award of a license to low-THC license
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`applicants from 2015 who had a legal challenge pending and previously came
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`within one point winning a license.
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`
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` Moreover, the Department was directed to license four new medical marijuana
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`treatment centers (MMTCs) within six months after the registration of 100,000
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`active qualified patients in the medical marijuana use registry. In addition, the
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`legislation directed to Department to issue four new medical marijuana licenses
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`each time an additional 100,000 qualified patients are added to the registry. None
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`of this was done---effectively giving the companies that already obtained their
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`MMTC license as a special privilege an even greater head start in the medical
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`marijuana market on future MMTCs.
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`
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` The 2017 legislation did away with the 30-year nursery/400,000 plant
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`requirements for new license holder—but continued to protect the special privilege
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`given to 30-year nurseries in the original low-THC legislation. The 2017
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`legislation did establish criteria for an application process to obtain a new medical
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`marijuana treatment center license. Although the legislation was approved by
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`former Governor Rick Scott on June 23, 2017---as of this date the Department of
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`Health has failed to accept and process a single application for a new company to
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`obtain a medical marijuana treatment center license using the new criteria
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`established by the Legislature. The only current license holders all relate back to
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`the applicants for low-THC licenses in 2015.
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`
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` Shortly after taking office current Governor Ron DeSantis expressed dismay
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`with the failure of the Department to issue new licenses. At a press conference in
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`Winter Park on January 17, 2019 Governor DeSantis said “We need to have the
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`peoples’ will represented in good law that is doing what they intended. I look at
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`how some of this was created, where they (lawmakers) created a cartel,
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`essentially.”
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` Initially, the Governor was also very critical of the vertical integration licensing
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`scheme currently in place. He has since moderated his position and he doesn’t
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`know if “vertical is unconstitutional”. The Governor has also said that the initial
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`30-year requirement for a low-THC license “really restricted the ability of folks to
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`be able to participate” in the medical marijuana industry in Florida.6
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`6 https://www.orlandoweekly.com/Blogs/archives/2019/01/30/ron-desantis-walks-back-opposition-to-floridas-
`medical-marijuana-system
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` The Department did award additional licenses to members of the privileged
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`class of 30-year nurseries with 400,000 plants that previously applied for a low-
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`THC license, who came within 1 point of having the highest score for a region, and
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`had pending legal action to challenge the decision of the Department. A total of 8
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`licenses were awarded on or about April 19, 2019 which resolved a number of
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`pending legal actions against the Department.
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`F.S 381.986 (8)(a) is Unconstitutional Special Law
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` This Court has previously addressed the issue of whether a statute is an
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`unconstitutional special law on numerous occasions. For example, in Lawnwood
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`Medical Center, Inc. v. Seeger, 990 So.2d 503, 517–18 (Fla. 2008), this Court held
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`that a special law affecting two private hospitals in St. Lucie County, which were
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`both owned by the same private corporation, provided an unconstitutional privilege
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`because it granted the corporation "almost absolute power in running the affairs of
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`the hospital, essentially without meaningful regard for the recommendations or
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`actions of the medical staff." This Court specifically considered whether the
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`"privilege" was "economic favoritism over other entities similarly situated" or
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`whether " ‘privilege’ encompasses more than a financial benefit." Id. at 510. This
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`Court "conclude[d] that a broad reading of the term ‘privilege’ as used in article
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`III, section 11(a)(12),—one not limiting the term to any particular type of benefit
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`or advantage—is required." Id. at 512.
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` In determining the plain meaning of the constitutional text "grant of privilege to
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`a private corporation," this Court in Lawnwood considered dictionary definitions
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`of "privilege" from the time when the text was adopted, noting that "[t]he
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`definitions have not substantially changed from those that existed at the time of the
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`1968 constitutional revision." Id. at 511 n.10 ; see Myers v. Hawkins, 362 So.2d
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`926, 930 (Fla. 1978) The Court in Lawnwood explained that "definitions from
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`other state supreme courts construing similar provisions in their constitutions
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`parallel the dictionary definitions as well as the common sense understanding of a
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`‘privilege’ as connoting a special benefit, advantage, or right enjoyed by a person
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`or corporation." Id. at 512. In other words, in common parlance, a privilege is
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`having something that others do not have. Venice HMA, LLC v. Sarasota Cnty.,
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`228 So.3d 76 (Fla. 2017)
`
`
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` When it comes to a license to operate a MMTC in Florida—a special privilege
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`was made available to a select class of private corporations---nurseries that have
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`operated continuously in Florida for 30 or more years and who are registered to
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`cultivate 400,000 or more plants. The select class of private corporations with a
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`MMTC license that originally applied for a low-THC license certainly have
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`something that others do not have. They are the only companies to receive a
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`MMTC license in Florida.
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`Where Do We Go From Here?
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` The amended provisions of F.S. 381.986 (8) (a) that again perpetuates the
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`privilege of providing a medical marijuana treatment center license to a 30-year
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`nursery with 400,000 plants who applied for a low-THC license appears to contain
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`a severability clause that states “If this subparagraph or its application to any
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`person or circumstance is held invalid, the invalidity does not affect other
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`provisions or applications of this act which can be given effect without the invalid
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`provision or application, and to this end, the provisions of this subparagraph are
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`severable.”
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` Interestingly, at least one current license holder previously challenged the
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`constitutionality of an unrelated provision in F.S. 381.986 taking the position that
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`the Legislature knew the provision was “suspect” and therefore provided a
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`severance clause in order to preserve the remainder of the statute. See George
`
`Hackney, Inc. d/b/a Trulieve v. Florida Department of Health, Second Judicial
`
`Circuit (Case No. 2018 CA 000698).
`
`
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` If the Court determines that the severability clause is, for whatever reason,
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`flawed there is still a way to address the unconstitutional provisions of the statute
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`without throwing out the entire statute. In Cramp v. Board of Public Instruction of
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`Orange County, 137 So.2d 828 (Fla.1962), this Court established a four-prong test
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`for analyzing whether an unconstitutional portion of a statute is severable from the
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`remaining portions.
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`
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` When a part of a statute is declared unconstitutional the remainder of the act
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`will be permitted to stand provided: (1) the unconstitutional provisions can be
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`separated from the remaining valid provisions, (2) the legislative purpose
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`expressed in the valid provisions can be accomplished independently of those
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`which are void, (3) the good and the bad features are not so inseparable in
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`substance that it can be said the Legislature would have passed the one without the
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`other and, (4) an act complete in itself remains after the invalid provisions are
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`stricken. Cramp, 137 So.2d at 830. Severability is an option if the legislature's
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`"clear purpose in enacting the statute" remains after severing the unconstitutional
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`portion. Richardson v. Richardson, 766 So.2d 1036, 1041 (Fla.2000), Homestead
`
`Hosp., Inc. v. Miami-Dade County, 829 So.2d 259 (Fla. App. 2002). The
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`severability test established in the Cramp case appears to apply here.
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` It is worth noting that the statutory provision requiring vertical integration of a
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`medical marijuana treatment center is in a different subparagraph of the statute
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`than the special law provision. Therefore, it appears the Court may separate and
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`consider the “special law” issue independent of other issues raised in this appeal,
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`including the constitutionality of the vertical integration requirements in the
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`statute.
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` This is important for two reasons. First, although the decision of this Court
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`could have significant impact on countless companies that hope to enter the
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`medical marijuana market in Florida in the future---there are specific and
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`identifiable parties (including the Respondent Florigrown and numerous
`
`Intervenors) who have already been expressly denied an opportunity to enter the
`
`market and have therefore pursued this action.
`
`
`
` Second, it would be enormously destructive to the medical marijuana industry
`
`in Florida to essentially “blow up” the current regulatory scheme by voiding the
`
`MMTC licenses that have already been issued by the Department of Health. A
`
`more practical approach may be to acknowledge the legal shortcomings of the
`
`current regulatory framework in the past but look forward with the goal of opening
`
`
`
` 18
`
`

`

`
`
`the medical marijuana market in Florida in a way that is consistent with the Florida
`
`Constitution.
`
`
`
` Unfortunately, the Court does not have the option of simply finding the current
`
`version of the statute regulating MMTC licenses an unconstitutional special law
`
`and reverting back to the prior law since the prior statute was also an
`
`unconstitutional special law. In the absence of a law to guide the way forward the
`
`Court is left with the task of fashioning an equitable remedy to resolve this matter.
`
`
`
` Because the Department of Health has completely ignored deadlines for
`
`accepting applications and awarding additional licenses set out in both the
`
`Constitution and statute—the Court is left with no alternative but to establish
`
`deadlines for the Department. To avoid disruption in the market that would have
`
`an adverse impact on patient access to affordable medical marijuana the Court
`
`could keep the current MMTC licenses intact and direct the Department of Health
`
`to accept applications for registration from Florigrown and the Intervenors in this
`
`matter within a reasonable period of time---perhaps 90 days. If Florigrown, and
`
`any of the Intervenors, meet the criteria established in F.S. 381.986 (8) (b) the
`
`Department should be directed to issue a vertically integrated license within 180
`
`days. Thereafter, perhaps within 24 months the Department could begin accepting
`
`
`
` 19
`
`

`

`
`
`applications for registration and award licenses for either a vertically integrated
`
`MMTC or a horizontally integrated MMTC based on the choice of the registrant.
`
`
`
` Alternatively, the Court could relinquish jurisdiction to the Trial Court for the
`
`purpose of holding a Hearing to determine a reasonable timeline for the
`
`Department to accept applications and register Florigrown and any Intervenors that
`
`meet the statutory criteria for a MMTC.
`
`
`
`Conclusion
`
` The statute regulating medical marijuana in Florida is a special law which
`
`provides a special privilege to a select group of identifiable private corporations in
`
`violation of Article III of the Florida Constitution. Accordingly, Triangle Capital,
`
`Inc. respectfully request that this Court find in favor of the Petitioners.
`
` Respectfully submitted this 10th day of Septe

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