State Politics

Prepare for cannabis growth, not ‘green rush’ in Florida, Colorado pot czar warns

Inside South Florida’s only legal medical marijuana grow operation

Modern Health Concepts owns South Florida's only legal medical marijuana grow operation. The company recently allowed a Miami Herald photographer and reporter to tour the facility.
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Modern Health Concepts owns South Florida's only legal medical marijuana grow operation. The company recently allowed a Miami Herald photographer and reporter to tour the facility.

In 2016, voters decided to make medical marijuana legal in Florida. A bill to create an official hemp program in the state just passed the Legislature and awaits the stroke of Gov. Ron DeSantis’ pen.

But some supporters ask where is the “green rush” of economic growth?

Well, comparing green to gold may be the wrong analogy.

Andrew Freedman, who served as Colorado’s first cannabis czar, told attendees at an Economic Club of Florida event Thursday that instead, cannabis in Florida should be treated as agriculture instead of alloy.

He pointed to a photo of gold miners with picks, pans and Levi’s jeans. Then he directed the crowd to a photo of a high-tech indoor marijuana grow facility.

“When you had a gold mine and you were finding gold ... you might have spent less finding that gold than what you sold it for at the end of the day,” he said at the event, hosted at the Florida State University Alumni Association. “Those are limited in the cannabis system.”

Freedman, of Denver consulting firm Freedman and Koski, worked to implement voter-mandated legalized recreational and medical marijuana while serving in his former role, and helped develop Colorado’s operating model for cannabis regulation. He now advises other governments on cannabis legislation.

Cannabis requires far more infrastructure, investment and time-consuming rule making to be successful as a crop.

His talk centered on the idea of turning an agricultural commodity like cannabis into a consistent, long-term, profitable investment.

In cannabis, he said, the regulations will determine who profits. Florida has some of the most profitable licenses in the world, which is a result of the small list of 22 licensed businesses allowed to grow, process, sell and market cannabis products in Florida. In California where the market is larger, business is less lucrative, Freedman pointed out.

There are 225,000 card-carrying medical marijuana patients and 126 dispensaries in Florida.

“More than in any other market, government rules determine the entire chessboard of where we’re going,” he said. “If you have one of those licenses [in Florida] that’s pretty cool for you. From an investment standpoint, having a limited license system like Florida is a more advantageous system than in California.”

Voters approved a constitutional amendment legalizing medical marijuana in 2016, and then the Legislature passed and former Gov. Rick Scott signed a law allowing access to the drug in pill, oil, edible and vape form but made it illegal to smoke. The Legislature passed and new Gov. Ron DeSantis signed a bill reversing the smoking ban this year.

Since then, eight more licenses have been added to the system and the patient count rises steadily, according to the Office of Medical Marijuana Use’s monthly alerts.

The office’s director, Courtney Coppola, agreed that the “gold rush” comparison isn’t quite right.

“Individuals panning for gold could access a high-value commodity through a relatively low-cost and simple operation,” she said.

That’s not so much the case in Florida, she added

“The large-scale production of medical marijuana in today’s modern environment not only requires significant capital and resources, but also a high level of oversight to ensure product safety for patients,” she said. “Florida’s medical marijuana treatment centers utilize sophisticated cultivation and processing operations in order to produce high-quality, safe medicine.”

In addition to medical marijuana, hemp as an alternative crop is also set up to become a burgeoning industry in the state.

Following the passage of the 2014 federal farm bill, hemp growing became allowed under certain circumstances by research institutions and state departments of agriculture. The 2018 farm bill removed prohibitions on industrial hemp in place since 1937 and authorized states to create hemp programs beyond the university research setting.

Florida got on board this year, when the Legislature passed a bill that allows the Department of Agriculture to create a state hemp program.

While the hemp bill is still waiting on a signature from DeSantis, plans are already in motion to have licenses issued before the year is out.

At an event earlier this week, Florida’s first cannabis director, Holly Bell, reiterated a point she’s made before that there is an immediate demand for hemp and CBD products, and that the first big crop of industrial hemp will likely happen by 2020.

Bell, who helped grow the hemp industry in Tennessee before she moved to Florida, said she’s planning to approach the program by looking at what other states have done right and wrong.

“There are 13 states that have very active commercial hemp programs,” Bell said Monday. “And the commercial hemp programs are producing almost a billion dollars as of 2018.”

Freedman said the best growers and producers are the ones who can “win under multiple scenarios,” not bet on timing or certain regulatory setups.

“They will thrive in any situation,” Freedman said, noting how quickly the industry and the rules regulating it will continue to change.

He said the best businesses will also have lucrative customers, chiefly the mainstay users of cannabis. It can cost a lot of money to get new people into the market, he said.

“People say cannabis is the new Chardonnay … be careful about that,” he warned.

Samantha J. Gross is a politics and policy reporter for the Miami Herald. Before she moved to the Sunshine State, she covered breaking news at the Boston Globe and the Dallas Morning News.

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