State health officials have set in motion a process to issue at least 22 medical marijuana licenses in a move to double Florida’s medical cannabis market. The health department has also published a rule making it quite expensive to renew the marijuana trading license every two years, by increasing it from $60,000 to $1 million. This increase came when Governor Ron DeSantis said the marijuana enterprises need to pay more to operate within Florida.
The health officials will implement batching cycles for the license applications. The reason behind the batching introduced is to avoid costly litigation costs. This batching will be established in a separate rule. The health officials did not disclose how many licenses will be made available. The application fee for new licenses has also been increased from $6,830 to $146,000, creating a buzz among the attorneys, investors and lobbyists within the industry.
Jeff Brandes, a former senator, said that the number of licences isn’t the problem; rather, the structuring is the issue, says Brandes. “It is illegal to only grow marijuana in Florida. If one is to distribute or have treatment kiosks only, that’s also illegal,” he stated. “A marijuana entrepreneur has to be involved in the entire process from growing to distributing marijuana. This makes marijuana very expensive than it ought to be. This in turn causes marijuana facilities to run out of products quite too often.
He added that the government could have addressed this, but owing to laxity, cartels now run the show, which poses a risk to the health of patients.
According to a cannabis data analysis company Headset, Florida’s 22 million population, the aged included, is a perfect hub for the medical marijuana market countrywide. Florida has a total of 22 licensed entrepreneurs and recorded $1 billion in revenue for the first half of 2022.
A 2017 law created a framework for the medical marijuana segment, allowing the health department to issue new licenses because of the influx of new patients. But since the installment of the incumbent governor in 2019, this process has been left hanging. The governor blames the supreme court of Florida for the delay due to litigation.
The move to accord more licenses was appreciated by players in the industry. The new, increased renewal fee was calculated by factoring in the regulation costs the state incurs. Consequently, to renew a license will cost a marijuana entrepreneur about $1.3 million between January 2023 and December 2024.
The rules were released a month after the health department installed Christopher Kimball, an ex-Navy member and counsel, as the new cannabis czar of Florida.
As more applicants are granted licenses to enter the regulated marijuana industry, the potential for other entities that are serving the cannabis industry, such as Advanced Container Technologies Inc. (OTC: ACTX), to also expand their reach increases.
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