Florida's $1.3 billion medical marijuana industry could nearly double by late 2022
(The Center Square) – Florida is set to nearly double the availability of medical marijuana over the next 18 months, pocketing millions in new license fees and tax revenues from an industry already generating $1.1 billion in Sunshine State sales.
The Florida Department of Health (DOH) is expected to issue up to 19 new medical marijuana treatment center (MMTCs) licenses under the state’s vertically-integrated regulatory scheme this year.
Florida has issued 22 MMTC licenses. Fourteen are active with eight awarded via lawsuits and likely for sale, where the bidding starts at $40 million. Acreage Holdings, Inc., paid $67 million for Nature’s Way’s MMTC license in January 2019.
Florida voters legalized medical marijuana in a 2016 ballot measure and lawmakers in 2017 adopted a program that requires operators manufacture and retail medical marijuana from “seed-to-sale.”
The DOH’s Office of Medical Marijuana Use (OMMU) is set to begin issuing new licenses after the 2017 vertical integration regulatory scheme was upheld May 27 by the Florida Supreme Court in a 6-1 vote.
Tampa-based Florigrown LLC, which had challenged the law, had until June 11 to petition for a rehearing, but did not do so.
Florigrown filed a lawsuit nearly three years ago challenging the 2017 law which it claimed only benefits corporations with the resources to be “vertically integrated” and pay $50 million for an MMTC license.
Two lower courts agreed. In October 2018, Leon County Judge Charles Dodson ruled the law’s cap on MMTC licenses, and “vertically integrated” requirement to grow, process and distribute, is unconstitutional.
The state appealed the rulings and secured a hearing before the Supreme Court last May, insisting lawmakers were “within the scope of policy discretion afforded it by the Florida Constitution in setting requirements for licensure and initial market participation.”
Right before Memorial Day, the court issued its verdict, reversing the lower court rulings and upholding the Legislature’s vertical integration framework in a 54-page ruling.
Under the 2017 law, new MMTC licenses would be issued for every 100,000 Floridians who secure marijuana patient ID cards after receiving a prescription from doctors licensed to prescribe marijuana.
According to OMMU’s June 25 update, there are 579,858 marijuana patients and 2,593 qualified physicians registered with the state.
Under the 2017 law, 15 more MMTC licenses should have been issued by now, but state officials were hesitant to do so until the Florigrown suit was resolved.
With certainty now established, the DOH is expected to issue at least 15 licenses in the next six months. Once the number of patients tops 600,000, four more could be available, meaning Florida could go from 22 marijuana operators to 41 by late 2022.
”This frankly doubles the size of the industry,” Medical Marijuana Business Association of Florida founder told Jeff Sharkey told the News Service of Florida, adding he expects the licenses to be issued over 18 months.
The 14 active MMTC license holders operate 347 dispensaries with three – Trulieve, Surterra, Curaleaf – controlling more than two-thirds of the market, according to MJBiz Daily, and the top six accounting for nearly 90% of all sales.
Trulieve, with 85 dispensaries, more than twice any competitor, controls 40% to 45% of the Florida market with sales approaching $500 million, according to MJBiz Daily.
Florida’s medical marijuana industry created nearly 15,000 jobs and generated nearly $1.23 billion in taxable sales in 2020, according to Arcview Market Research, which projects the industry could generate $6 billion in Florida sales by 2030.
The recently released 2021 MJBizFactbook projects Florida medical marijuana sales will approach $1.3 billion in 2021 and nearly $2 billion annually by 2025.