Last week the Department of Health received legal challenges from nurseries Costa Farms and Plants of Ruskin Inc., and the Florida Medical Cannabis Association, to its proposed rule for selecting the nurseries that will receive the licenses for growing and selling medical marijuana pursuant to the state’s newly enacted Charlotte’s Web law, called the Compassionate Medical Cannabis Act. The new state law, named after a Colorado girl who has benefitted from using the drug for her epileptic seizures, permits a strain of cannabis that is low in euphoria-inducing THC that can be used by patients, including children, suffering from epilepsy and other diseases.

The legal challenges are to the proposed regulations and rules that will be used to award the five licenses that the new law has authorized for cultivating, processing and dispensing medical marijuana. The challenges attack substantive elements of and processes outlined in the proposed regulations in the procurement and zoning context.

As it relates to procurement, the petitions allege that the rules regulating the selection of nurseries and the lottery system by which they will be selected (upon meeting the eligibility criteria of operating in Florida for more than 30 consecutive years and capacity to grow 400,000 plants) is vague, arbitrary and capricious because it’s an unauthorized random selection with no evaluative criteria. The challengers also allege that the lottery system improperly allows dispensing entities and other businesses to partner with nurseries and be part of numerous applications, but restricts in-state nurseries to the filing of one application.

The zoning-related arguments made by the petitioners assert that the zoning restrictions placed on dispensing organizations conflict with existing zoning regulations and decisions delegated to local governments, and thus are invalid exercises of delegated legislative authority. As new challenges are filed, the Department is faced with deadlines given by the legislature for establishing the regulatory framework, and concerns that delays in the process delay the timeframe in which patients will gain access to the medicine that they need.

The Department formulated the lottery selection system with the intention of staving off lawsuits that could arise in the form of bid protests if a traditional procurement vehicle was used instead. In the face of these challenges, however, the Department may desire to explore other options to achieve that goal. Additionally, clarifications as to the Department’s interpretation of zoning authority will be needed to address the petitions that challenge the zoning-related requirements of the regulations. We will further explore these issues and the Department’s potential options in our continued blogging on this topic.