State announces companies authorized to sell low-THC medical marijuana

State health officials announced Monday that five Florida nurseries have been chosen to cultivate and distribute the first legal marijuana in the state, opening the door to the sale and distribution of the non-euphoric strains next year.
State health officials announced Monday that five Florida nurseries have been chosen to cultivate and distribute the first legal marijuana in the state, opening the door to the sale and distribution of the non-euphoric strains next year.
Published Nov. 24, 2015

Five Florida nurseries, including two from Miami-Dade County, were selected Monday to cultivate and distribute the first legal marijuana in the state, opening the door to the sale and distribution of the non-euphoric strains next year to treat patients with seizure disorders and cancer.

Costa Nursery Farms, of Miami, won the bid for the Southeast Region. Knox Nursery of Winter Garden, will grow it for the Central Region. Hackney Nursery Company of Tallahassee will grow it for the Northwest Region. Chestnut Hill Tree Farm of Alachua will be the grower for the Northeast Region and Alpha Foliage of Homestead will grow it for the Southwest Region.

The decision moves the state closer to implementing the 2014 law that allows for marijuana low in euphoria-inducing tetrahydrocannabinol, or THC, and high in cannabidiol, or CBD. The law was intended to treat patients with intractable epilepsy and people with advanced cancer who obtain their doctors' permission.

To qualify for the low-THC based cannabis treatment, patients must obtain permission from a qualified doctor and be added to the Compassionate Use Registry.

Under the law, applicants had to have been in business in Florida for at least 30 years and grow a minimum of 400,000 plants at the time they applied.

Many of the five nurseries teamed up with consultants, investors, security firms, technology companies and out-of-state pot growers to develop their application. Each was chosen from a pool of 28 applicants from around the state by a panel of reviewers using rules developed by a panel that included five growers.

Four of the nurseries represented on the rules committee --- Costa Farms, Hackney Nursery, Chestnut Hill Farms and Knox Nursery --- also were winners in the application process, immediately drawing fire from other applicants.

"Today's award of licenses will raise serious questions about improper influence and self-dealing,'' said Taylor Patrick Biehl a lobbyist for the Medical Marijuana Business Association of Florida whose consulting firm represented three of the applicants.

"Maybe they learned something the rest of us didn't in terms of putting the applications together,'' said Jeff Sharkey, who heads the Medical Marijuana Business Association of Florida. "Every applicant will be reviewing the scoring and making some decisions in terms of how to proceed."

Each of the growers now will have 10 business days to post a $5 million performance bond to show they are serious about obtaining the license. If any of the applicants misses that deadline, the applicant with the next highest score in that region will be selected, the Department of Health said in a press release.

The clock also starts Monday for growers. The nurseries have 75 days to request cultivation authority and they must begin cultivating the low-THC cannabis within 210 days – or by June of next year.

In Southeast Florida, the unsuccessful applicants included Bill's Nursery of Homestead, Nature's Way Nursery of Miami and Redland Nursery of Homestead.

Costa Farms, the winning applicant in South Florida has been working vigorously to win the bid since the outset. The company is the largest nursery in the state and has been in operation as a registered nursery since 1984. A last-minute amendment inserted onto the low-THC bill in 2014 by the Florida House banned any grower from applying who had not been in business since 1984 and had an inventory of at least 400 plants at the time of the application. Costa Farms fit that description.

When the first rule proposed a lottery system to select the applicants, threatening their chances of getting picked, the company sued the state and persuaded a judge that selecting providers of medical cannabis by lottery was not what the Legislature intended.

The rule was thrown out and a new rule was established by a committee that included representatives from the industry – including Costa Farms.

According to the Costa Farms application, the company plans to convert an existing facility into a 24,000 square foot, "fully climate controlled 'clean' greenhouse" that grows plants in containers, finishing in 20-gallon pots. Organic additives will be used and pests will be controlled organically.

Plants will be carefully tracked from cultivation to distribution using a monitoring system developed by BioTrackTHC, a Fort Lauderdale-based company, the application says. The system will allow them to track every plant and keep precise inventory that allows patients to pre-order medical cannabis based on their needs.

The company disclosed that it will need between half a gallon to one gallon of water per plant per day.

Once the product is produced, it will be transported 4.6 miles to the processing facility by a refrigerated van that is retrofitted with tracking devices and video surveillance.

The company has already obtained a license to cultivate a strain it calls "Haleigh's Hope," similar to Charlotte's Web, which is an anti-seizure strain named after Haleigh Cox, a 5-year-old Georgia girl who suffers from a severe seizure disorder called Lennox-Gastaut syndrome.

Patients who have obtained approval from specially-registered doctors will be able to obtain the medical marijuana from either the dispensing facility at their production plant but serve the majority of their customers through home delivery.

"We are committed to providing the safest and most effective treatment to those suffering from qualifying conditions and will work diligently to ensure its availability with as little delay as possible,'' Costa Farms said in a statement.

While Costa Farms will serve the Southeast Region of the state Alpha Foliage Inc. of Homestead was awarded a license to serve Southwest Florida. That region includes Charlotte, Collier, DeSoto, Glades, Hendry, Highlands, Hillsborough, Lee, Manatee, Okeechobee and Sarasota counties.

The Alpha Foliage's marijuana subsidiary will do business as Surterra Therapeutics 1 but, because the Department of Health allowed applicants to determine what portions of their application should be redacted and inaccessible to the public, most of the company's 1100-page application has been redacted. It is unknown where the company's facility will be located and where patients can purchase the low-THC product.

The growers are also banking on the Legislature to expand the number of medical conditions covered by the law or passage of the more wide-ranging medical marijuana initiative that could be on the November 2016 ballot.

United for Care, the group led by prominent attorney John Morgan, is collecting signatures for the measure that would establish a constitutional right to medical marijuana for a broad range of conditions. A similar amendment in 2014 got 58 percent of the vote, short of the 60 percent needed to become law in Florida.

Patients were supposed to have access to the low-THC products on Jan. 1, when doctors who had undergone special training were supposed to begin ordering the medication, but the process has been delayed because of lawsuits and a judge's decision last year that rejected health officials' first attempt at implementing the law.

Sharkey said there are about 20,000 potential patients in Florida that could benefit from the low-THC cannabis, also known as "Charlotte's Web." But that is a small patient base for an expensive investment, he said.

Legislation is moving through the House and Senate that would expand the patient base by allowing for more medical conditions to be covered under the "right to try" state law. The measure would also allow growers to cultivate strains with higher THC levels which cancer patients say is necessary.

"There has to be a market that is sustainable,'' Sharkey said. "More medical conditions and modifying the THC could expand the accessibility and the affordability."