Since November 9th, the medical marijuana business community is starting to mobilize in Florida. By the time the laws have come in effect for a year, sales by year end 2018 are expected to be in the $200M range, and projected to grow more than eightfold to $1.6B by 2020. Established businesses from across the country are investing in real estate, start-ups are springing up in the state, lawyers and consultants are developing relationships, and the hype keeps on increasing. On the radio (as heard earlier today), there are even ads inviting everyone to get their medical patient cards at block parties already!
When talking to industry insiders, however, the uncertainty factor is still evident. The duty of setting up regulations for cultivation & distribution rests within Florida’s Department of Health, and some important points have already been established:
- ID cards will start being given out no later than September 2017, an important decree as it’s taken two years for Florida’s Charlotte Web access cards to become a reality, establishing a clear milestone for when patients will be able to begin getting their treatment
- Amendment 2 does not currently give patients the power to grow flower on their own—they will depend on dispensaries (or “Compassion Centers”) for the medicine
Currently, there are six nurseries licensed in the state. But even then, Florida has not yet fully defined who will be able to grow and sell. We believe the demand will outstrip the supply these dispensaries will be able to provide initially as FL favors a more tightly regulated, limited market. Therefore, at some point the state will likely have to approve more Compassion Centers—and open up the market to more than just a few well-capitalized players (we’d hope). But if FL keeps the market’s players limited and only focuses on the already-approved entities, or even bring some of the growing and distribution operations under the state’s jurisdiction, a significant black market will remain in place. Several issues, we expect, will also be resolved in upcoming legislative meetings from January to March 2017; significant uncertainty over where opportunity will be available will be reduced and we will learn who will be the permit holders.
We have also seen numerous local governments establish moratoriums to gain more time to establish a variety of guidelines, principally dealing with zoning. These generally take six months to complete. Low doctor participation rates, at least initially, in the medical marijuana program are also a possibility, so we hope the state government will encourage the medical community to accept and engage in the program by simplifying access to marijuana and solidifying the new status quo.
At the end of the day, legislation is in the works at the state level, and at the local level governments are figuring out how to deal with a now legal substance. While some cities, especially those that are more family and community-centered, are opting to keep dispensaries secluded to more isolated industrial areas, overall we recognize state and local municipalities favor the opportunity that will come with implementation and the subsequent growth of the industry. We are confident Florida will be witness to many exciting developments over the next few months and are especially excited to see what the market will look like in 2018 as traction begins picking up and as more and more opportunities arise.