Lawsuit Filed Over Florida Medical Cannabis License Lottery


I have never been a fan of cannabis industry license lotteries. I get that there needs to be a fair way to allocate a limited number of licenses in a medical cannabis program, but having a lottery is not one of them. People should be approved because they are the best applicant, and there shouldn't even be license limits. Let the free market decide.

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Florida passed a CBD-only measure earlier this year, and the Florida Department of Health was tasked with licensing producers for the program. The Department of Health decided to have a lottery, which has resulted in at least one lawsuit. Per the Miami Herald:

Costa Farms of Miami, one of the state's largest farming operations filed an administrative complaint against the Department of Health Monday, alleging that it is violating the law authoritizing the selection of five companies to dispense low-THC cannabis by requiring they be selected through a lottery system.

The company claims that the lottery system violates the law authoritizing the selection of five companies to dispense low-THC cannabis because the lottery system, adopted by the agency after three public hearings, "is not mentioned in the legislation."

"The Department of Health has a duty to ensure that the dispensing organizations that are selected to make this medicine are the very best, not merely the luckiest,'' said Peter Freyre, vice president of Costa Farms in a statement. "We suggest that the Department abandon the notion that a lottery is the appropriate method for selecting dispensing organizations."

For evidence that a lottery doesn't work, Florida regulators should look at the licensing lottery in Washington. 56 of the retail licenses that were won in a lottery are in jeopardy because the winners haven't been able to comply with the process due to financial hardship and/or mismanagement. That's not the case with all of the outstanding applications, but it's a great example of people that won during the lottery phase, but are clearly in over their heads when it comes to actually opening and operating a successful business.