1. Health

Potential Florida pot crop prompts much interest, but business will be limited

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Published May 9, 2014

TALLAHASSEE —A tropical plant farmer in Gainesville is hoping marijuana will be the crop that finally helps him make money.

An orchid grower in Homestead has already researched the best machines to extract the oil from the low-THC cannabis to make it available to patients. A vegetable farmer in Highlands County says he has the money, the greenhouses and the technology; all he needs is the security cameras and armed guards.

And at the Florida Medical Cannabis Association, the phone is ringing off the hook from vendors, distributors and investors who want in on Florida's expected new crop.

This flash of interest was ignited by Florida legislators last week when they passed a bill on the final day of the session opening the door to a low-THC strain of medical marijuana to treat people suffering from epileptic seizures, muscle spasms and cancer.

But a last-minute amendment to the bill (SB 1030), which Gov. Rick Scott has promised to sign into law, will keep a tight lid on growers wanting to cash in on the medical marijuana business. The amendment limits the number of growers to just five, parsed by geography in five different regions of the state.

And the bill requires that only those growers who have been in business continuously for 30 years and have inventories of 400,000 or more plants would qualify to compete for the five regional permits. That means only 21 of the hundreds of nurseries in Florida meet those strict requirements, according to the Florida Department of Agriculture.

"Is 30 years an arbitrary number? Probably, but it's a first step," said Ben Bolusky, CEO of the Florida Nursery, Growers and Landscape Association, whose organization helped to develop the amendment.

Opponents say the attempt to cull the competition was arbitrary and unfair. Bolusky and other supporters say it will help ensure a financially strong grow-house and distribution system will get up and running so patients can get a safe product quickly.

"It certainly telegraphs that they didn't want any new or fly-by-night operations to set up in Florida,'' he said.

The bill requires the Department of Health to write the rules and select which applicants will be eligible to grow the marijuana by Jan. 1, 2015. The marijuana must contain 0.8 percent or less of the psychoactive THC or tetrahydrocannabinol, and more than 10 percent of CBD or cannabidiol, the ingredient which helps to control seizures.

Growers must work closely with the University of Florida's agriculture school, obtain a $5 million bond, have the ability to sustain operations for at least two years, conduct employee background checks, prove they can run a secure operation and be able to distribute the product. The dispensing operation must hire a medical doctor to supervise the sale to patients and all employees must be screened.

"It would not be an inexpensive proposition,'' Bolusky said. "Clearly the Legislature didn't want everybody jumping in. They want to be able to monitor, regulate and enforce those business operations."

The House amendment caught many by surprise, including Senate Republicans who tried and failed to broaden it to include any farmer, not just nurseries, who have been in business 10 years or more.

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The amendment "infringes on free market principles that we all stand up for in this chamber,'' said Sen. Rene Garcia, R-Hialeah.

Cerise Naylor, executive director of the Florida Medical Cannabis Association, which runs a clearinghouse for growers and vendors to get information and create partnerships, said the amendment "threw a curve ball at everybody."

"This shut the door on a lot of people,'' she said. "A lot of people are angry. Now people are working to find growers who are willing to do this and partner up."

Eric Cord of Windmill Farms in Zolfo Springs said he has already been contacted by several people who want to partner. "I believe the investment is going to be quite large,'' he said. "But we have no idea what the return is going to be."

Prospective investors from around Florida and the nation have been lining up for several weeks as it appeared that the Legislature was going to pass the bill for a limited strain of medical cannabis, said Louis Rotundo, lobbyist for the Medical Cannabis Association.

"My phone has been blowing up for three days — from every business profession to growers, to those who invest in the growers,'' he said. "My advice to everybody is sit tight. This is a developing story. Let's see where this goes because the pressure is on the Department of Health."

Many believe that the regulatory framework established now for the limited strain of marijuana will serve as the foundation to limit the scope of a constitutional amendment on the November ballot if voters approve legalizing marijuana for a broader range of medical purposes.

"Growers have had the mindset for many years that if Florida were ever to get medical marijuana, everybody and their brother is going to put an acre in and drive down the cost,'' said Randy Gilde, CEO of Delray Plants and one of the chosen 21 now eligible to grow it. "The way this is set up, that's not going to happen, so we're looking at it.''

As did many of the nursery owners on the list of 21, Alan Shapiro of Grandiflora in Gainesville said he doesn't "know anything about growing marijuana" but he has been contacted by investors and is considering it.

"The nursery business has been pretty bad for the last five or six years,'' he said. "It would be nice to make some money for a change instead of losing money."

One of the companies on the list is Simpson Nurseries, a massive farm in North Florida, operated by the family of state Rep. Halsey Beshears.

Beshears, R-Monticello, is a freshman state representative whose campaign treasurer is the lobbyist for the Florida Nursery Growers Landscape Association. Beshears' cousin is Adam Hollingsworth, Gov. Scott's chief of staff. It's unclear why Beshears didn't file a conflict of interest report when he voted for the bill, but his father says it's unlikely the company will farm marijuana.

"We're certainly not thinking about it today,'' said Fred Beshears, owner of Simpson Nurseries. "I'm very leery about that and anything to do with marijuana.''

The amendment sponsor, Rep. Matt Caldwell, R-Lehigh Acres, said the goal was to err on the side of limiting who could qualify now, and adjust it going forward. "We're doing something new and completely different,'' he said.

Caldwell predicted it will take the state six months to develop rules and choose distributors. Growers say it will take another 10 weeks to grow the marijuana and extract the oil.

"I guarantee we're going to be back next year to correct our mistakes," Caldwell said.

Not everyone who qualified as a grower under the bill is eager to get into the pot business.

Kevin Rehberg, controller at Speedling Inc., a 60-acre nursery in Bushnell, just north of Tampa, said that privately owned companies are more likely to be willing to take the risk than his, which has been in business for more than 30 years but is owned by a Singapore company.

"Our ethics policy as it relates to our ownership group based in Singapore would preclude us from getting involved even if it were made legal by the state,'' he said.

Mary Ellen Klas can be reached at meklas@MaryEllenKlas.