Florida Health Officials Set to Increase Medical Marijuana License Renewal Fees
Sanctuary Cannabis Challenges $1.33 Million Fee, Alleging Lack of Logic and Transparency
Florida health officials have stepped to the plate to vigorously defend a substantial increase in medical marijuana license renewal fees despite facing a challenge from Sanctuary Cannabis, one of the Sunshine State’s leading licensed medical marijuana operators.
The dispute between Sanctuary Cannabis and the Florida Department of Health centers around a planned hike in medical marijuana renewal costs. The increase has raised concerns about transparency and the logic behind the state’s entire fee structure. Currently, the objections are being spearheaded by Sanctuary as they demand answers to the shocking numbers.
Marijuana Card Renewal Increases
Last December, the Florida Department of Health implemented a rule establishing a formula for determining medical marijuana license renewal fees. The so-called ‘formula’, predicted a staggering increase in renewal costs surging to over 22 times the previous biennial fee of $60,000, which had been in place since the launch of the state’s medical marijuana program six years ago.
Sanctuary Cannabis Takes a Stand
Sanctuary Cannabis, one of the state’s 24 licensed medical marijuana operators, filed an administrative challenge last month arguing that the fee is “wholly without logic or reason” because it does not take into account tens of millions of dollars from patients who pay $75 a year for identification cards to participate in the program.
Last month, Sanctuary Cannabis filed an administrative challenge contending that the new $1.33 million license renewal fee is completely unreasonable The main point of Sanctuary’s entire argument is that the fee does not take into account the tens of millions of dollars already contributed by patients.
Within the state, each medical marijuana user pays $75 annually for required identification cards that denote them as medical marijuana users and let them purchase the products at any of the state’s retailers headed by the 24 licensed cannabis operators.
With more than 854,000 qualified patients, the department is projected to collect $114 million in 2024-2025.
According to Sanctuary’s petition, the state amassed approximately $84 million during the 2022-23 fiscal year from a combination of cannabis-related fees, fines, and patient registrations.
Stance of Florida Department of Health
The health agency anticipates a surplus of nearly $4 million for the 2023-24 fiscal year and an impressive $61 million for the subsequent fiscal year, highlighting robust financial projections.
State officials, however, are strongly defending the fee, asserting that it aligns with charges already mandated by Florida law. According to the law, the health department must adopt rules that establish a procedure for issuing and biennially renewing licenses, including setting fees sufficient to cover the costs of implementing and administering all aspects of the medical marijuana program.
In response to the administrative challenge, Ed Lombard, an attorney representing the health department, argued that the department executed the legislative directive by formulating a fee for initial license applications and renewals, by the legislature’s mandate.
Despite the health department’s efforts to dismiss the case, Administrative Law Judge William Horgan issued an order allowing the challenge to proceed, at least temporarily. Horgan also granted an emergency motion from Sanctuary, compelling health officials to disclose all data and information used to determine the biennial fee. The formula appears to rely on the number of licensed operators and the cost of regulating the medical marijuana program.
Health officials initially resisted providing this information, contending that Sanctuary’s challenge focused on the formula’s elements rather than asserting improper calculations of the renewal fee. Sanctuary’s legal team argued that reviewing the fee calculation information was crucial for understanding how the renewal fee was determined and identifying any potential errors.
The Department of Health was given until Friday morning to provide the information, allowing Sanctuary’s lawyers to conduct a deposition of a health official on Monday morning. Horgan also instructed Sanctuary’s attorneys to file a supplemental response by Monday, addressing any new evidence arising from the deposition and the information about the fee calculation.
Amounts Collected by Florida Health
Sanctuary’s challenge draws heavily on a budget request submitted by the health department to the Legislature for the 2024-2025 fiscal year.
The request revealed that the department collected the following:
- $14.9 million in application and renewal fees for licenses
- $65 million from patients and caregivers during the 2022-2023 fiscal year.
Sanctuary does acknowledge the department’s need to generate revenue to support its operations, they also argue that the substantial renewal fee increase is unwarranted based on the the department’s reported surpluses and projections.
The legal battle continues as both sides are set to present their arguments while sharing the broader potential implications for the regulation and funding of medical marijuana programs in the state of Florida.