Florida’s increased license-renewal costs for medical marijuana companies is upheld

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An appeals court has rejected a challenge to a Florida Department of Health rule that led to dramatically increased license-renewal costs for medical marijuana companies. A three-judge panel of the 1st District Court of Appeal on Wednesday upheld a 2023 decision by Administrative Law Judge William Horgan in the challenge filed by Sanctuary Cannabis. Department of Health officials in December 2022 released a rule that created a formula for establishing a license-renewal fee. The rule boosted renewal costs to about $1.3 million, more than 22 times the $60,000 biennial fee paid in the past by pot companies, which are known as medical marijuana treatment centers. Sanctuary Cannabis filed a challenge, arguing the revamped fee was “wholly without logic or reason” because it did not take into account tens of millions of dollars from patients who pay $75 a year for identification cards to participate in the medical marijuana program. But the appeals court said it saw “no arbitrariness or capriciousness in the rule’s formula” because it followed a state law about the fees. The ruling, written by Chief Judge Timothy Osterhaus and joined by Judges Ross Bilbrey and Thomas Winokur, said the law’s “plain text demands that MMTC (medical marijuana treatment center) licensing fees cover the department’s implementation and administration costs. Conversely, the statute says nothing of giving flexibility to the department to net out the card fees paid by customers or other fines to lower the MMTC’s licensing costs arising from the department’s implementation and administrative expenses. And so, we cannot conclude that the department’s license-fee calculation or its interpretation of (state law) is incorrect, arbitrary or capricious.”