Cannabis businesses, which have increasingly turned to Florida’s rapidly growing market, spent $3.7 million on lobbying in the state in 2019—more than double the year before—according to a Cannabis Wire analysis. What does that portend for an uncertain 2020?
What all this 2019 lobbying cash was aimed at is not entirely clear. But it came as state lawmakers, regulators, and the courts weighed issues that could profoundly impact the fledgling industry. These include a legislative cap on the amount of THC in cannabis products, a new law allowing medical patients to smoke cannabis flower, and big industry-shaping court cases challenging everything from the number of cannabis companies licensed in the state to Florida’s medical cannabis law itself.
The lobbying increase also signals that the Sunshine State has been viewed as a land of opportunity for cannabis companies, especially big ones. “The Florida market looks ripe for opportunity,” said Andrew Livingston, director of economics and research at Vicente Sederberg LLP, a cannabis law firm.
The trend of spending heavily on lobbying in Florida was expected to continue in 2020, but the economic damage from the coronavirus crisis is likely deep and lasting enough to seriously trim the industry’s sails. Still, the booming medical cannabis market is approaching 350,000 patients, and regulators and courts are set to consider a range of consequential issues, from eliminating vertical integration of the industry to the rollout of Florida’s hemp industry. All of these possibilities could draw some lobbying dollars.
In 2019, the state’s two largest players, Parallel and Trulieve, vastly outspent the other thirty-seven companies registered to lobby. Lobbyists are required to report income in $10,000 increments. Cannabis Wire uses the median number in each range ($1-$9,999 is counted as $5,000, for example).
Parallel spent an estimated $490,000 across three lobbying firms in 2019, according to compensation reports, the forms in which lobbyists in Florida are required to report what they have been paid. The Atlanta-based company, which operates thirty-nine stores in Florida, also sunk millions of dollars into an adult use ballot initiative last year, though the measure failed to garner enough support to appear before voters this November.
Trulieve paid lobbyists around $335,000 last year. Trulieve is the dominant power in Florida, with forty-five dispensaries and by far the most cannabis sold per month, according to the state Health Department.
MedMen and Acreage Holdings, which is being acquired by global cannabis giant Canopy Growth, each spent approximately $180,000 on lobbying in 2019. A number of other multi-state operators, including Curaleaf, Green Thumb Industries, and Harvest Health and Recreation spent around $100,000.
Notably, Native Roots, which does not hold a license in Florida, also paid to lobby state officials last year. The Denver-based cannabis company spent an estimated $120,000 on lobbying from January to October.
There is a deep interest in Florida because of how restrictive the market is, said Jonathan Robbins, chair of the cannabis practice at Akerman LLP. State law requires cannabis operators to be vertically integrated, meaning they control the plant from seed to sale. Florida also places a cap on the number of licenses given out. This means starting a cannabis business is very expensive and it is difficult for smaller operations to compete.
But that limited market could open up. The Florida Supreme Court is currently weighing the constitutionality of these two requirements.
Robbins said it is likely that major multi-state operators lobbied against efforts to open up the market, because they have an interest in maintaining control. “Those operators want to continue to keep it a very small playing field,” he said.
It is also possible that if the court decides to open up the markets, lobbying dollars could flow in 2020 from companies hoping to enter it.
Lawmakers also considered a wide array of smaller cannabis-related bills in 2019. State Senator Jeff Brandes successfully championed a measure allowing patients to smoke cannabis flower, which took effect last March. It was a welcome change for the industry, which had previously been banned from selling flower under Florida’s medical cannabis law.
Meanwhile, state Representative Ray Rodrigues pushed a bill to cap the amount of THC in cannabis products at 10%—a measure that ultimately failed. Cannabis companies and advocates alike vocally opposed the effort. (Lawmakers tried again this legislative session, but failed.)
The courts also played an active role in Florida’s cannabis industry last year, as the licensing process was the subject of a number of lawsuits from individuals and entities who felt they were unfairly left out.
Robbins said many companies with ongoing legal disputes are spending money on lobbyists “who they believe have the governor’s ear, to try to force a settlement whereby they’d end up with a license.”
Lawsuits and new state regulations are expected to continue to shape the landscape in 2020, and to draw at least some lobbying dollars. And lawmakers and regulators may have to rethink the current law entirely, depending on the outcome of the case before the Supreme Court.
“With any emerging industry, as it starts to mature, you’ll see a lot of policy reform driven by litigation and regulatory action,” Robbins said.