Florida CBD Market Taking Shape in Draft Regulations

Florida’s state Department of Health has
now issued its second draft of guidelines for the new legal CBD medical market
signed into law in June by Republican Governor Rick Scott.  The so-called “Charlotte’s Web” legislation
legalizes the medical use of the cannabinoid CBD, primarily for children
suffering from epilepsy.

The development of the Florida market is
one of the most interesting in the country right now.  It is also a test of whether voters—ready for
reform—will accept much weaker versions of access passed into law by state
legislators, or whether states will follow Florida’s lead and organize for
greater access via citizen ballot box initiatives.

The market here is shaping up to be one of
the most expensive in the country. 
According to the draft rules just released, it may cost upwards of
$300,000 just to obtain a CBD only dispensary license (potentially doubling the
fee of $150,000 already suggested).

The rules are shaping up to be slightly
restrictive, seeing as they create a high barrier for entry on other fronts, not
just access to cash reserves.  Already
proposed in the first round of rules drafted by the state is a proposal that
only existing nurseries with a total of 30 years or more of growing experience
be eligible for the lottery license.  Additionally,
only those able to grow at least 400,000 plants would be eligible to apply as
well.  According to the state’s
Department of Agriculture, this would already limit potential growers in the
state to a pool of 41, even potentially eligible applicants.

A very high performance bond may also well
be required ($5,000,000), making the market already ten times more expensive
than the most expensive municipal market in Colorado to date.

Like other states, the rules also require
that business owners and all employees are submitted to background checks, are
able to implement comprehensive security systems and inventory tracking systems
that meet requirements.

It is unclear how much the vote to legalize
full cannabinoid use for medical purposes will impact the regulatory decisions relating
to CBD regulation. It is widely expected, however, that the state vote to amend
the constitution to allow medical sales (including those of high THC
medication) might open the market enough to allow for more democratic
competition.

Right now, the Florida market appears to be
headed in a restricted direction; limited to those who have large reserves of
cash and some kind of established farming infrastructure.  With that said, these are precisely the kind
of careful legislative tweaks to a developing market that make little practical
sense outside the statehouse.  Florida’s
climate is too damp for effective outdoor cultivation of medical cannabis.  Even existing farmers who qualify with
standing farmland will have to build indoor infrastructures if they hope to
compete with a sophisticated, high yield and potent indoor products. All in
all, growers and supporters alike are expected to watch on as the prospect of legalization
moves forward in November.