Starting March 21, Black farmers in Florida—or at least one of them—are finally getting an opportunity to get a medical cannabis license. The equity measure comes more than four years after it was promised in state law, a provision meant to help level a somewhat tilted playing field.
Did it? To weigh that question requires a dip into recent cannabis history and economics in Florida, and that history has a number of twists and turns.
In the most lucrative medical cannabis market in the country, licenses to grow and sell cannabis are coveted. So far, Florida has issued twenty-two of them, including to some of the biggest cannabis companies in the country, like Curaleaf and Trulieve. Only one has minority ownership: Cookies, a California-based retailer, which was co-founded by Gilbert Anthony Milan, Jr.
Producers looking to get their hands on a license have faced steep hurdles. They were required to show decades of experience working with large nursery operations. The stringent requirements were put in place before voters approved Amendment 2, the Florida Medical Marijuana Legalization Initiative, in 2016.
Two years before that, in 2014, lawmakers had passed a limited low-THC program under the Compassionate Medical Cannabis Act. Applicants for the program were required to be licensed for the cultivation of more than 400,000 plants and have operated as a nursery for at least thirty years.
That presented a notable challenge for Black farmers.
To go back a bit further in history: In the Pigford v. Glickman class action lawsuit against the United State Department of Agriculture, filed in 1997, Black farmers alleged racial discrimination in the agency’s distribution of farming loans and assistance between 1981 and 1996. The case was settled in 1999, paying out $1 billion in one of the largest civil rights settlements in history.
Fast forward: For Black farmers in Florida who wanted to take part in the 2014 low-THC program, a 2016 amendment to the program gave farmers who received a piece of the Pigford case settlement the opportunity to bid for three licenses to grow and sell cannabis. It also stipulated that the program would have to have reached 250,000 registered patients before it would distribute those three licenses. The amendment noted the new licenses didn’t have to be limited to Pigford litigants, although they did have to be included somewhere.
Then, in November of that year, Florida voters passed a much more expansive program legalizing full-strength cannabis for medical use. Lawmakers went back to their Tallahassee drawing board in 2017 to figure out how to implement the initiative. They ended up passing a law in a special session that year.
Some results: Legislators allowed producers already in the low-THC program or in line to join it to be part of the new medical industry. However, they revised how many licenses would be offered to members of the Pigford class—down to one. The original deadline to issue that license was October 3, 2017.
Complications ensued. Lawsuits have dogged the state’s medical cannabis program since its inception, including one case in which the state argued that the new law did not allow smokable forms of cannabis. That interpretation was overturned as unconstitutional in 2018, but other challenges remained. Meanwhile, as Cannabis Wire reported at the time, the Florida Supreme Court issued a ruling in May 2021 upholding vertical integration in the Florida Department of Health v. Florigrown case. (Vertical integration means operators are responsible for cannabis from the time a seed enters the ground until it reaches a patient’s hands).
Soon after the ruling, the Florida Department of Health dove into the process of issuing new licenses. Sort of. According to the 2017 law, the agency is supposed to make four new licenses available for every 100,000 patients who sign up for the program. The state hasn’t kept up. And that includes the single license for a Black farmer. Florida is on the hook to issue nineteen new licenses. And with the number of registered patients nearing 700,000, it could be required to add four more in the near future.
At a Senate Committee on Agriculture meeting in September 2021, Chris Ferguson, director of the state’s Office of Medical Marijuana Use, explained that his office froze the issuing of new licenses in the case the courts changed the program. It feared having to start over if the vertical integration scheme was overturned. In October 2021, the agency released an emergency rule to speed up the process for Black farmers to apply during a five-day period this spring, March 21 – 25. The Department of Health has not released rules for more applicants. The agency has been on a nearly three year hiatus since it last approved a Medical Marijuana Treatment Center.
The announcement about Black farmers courted immediate controversy, as Cannabis Wire reported. The supercharged and non-refundable application fee drew the most ire. For past applicants, it had been $60,000. For Pigford litigants, the fee is nearly two and a half times greater, at $146,000.
“It’s another way to eliminate the opportunity for Black farmers to participate,” state Representative Geraldine Thompson of central Florida told Cannabis Wire. Thompson was a state senator from 2012 to 2016. She says she fought for the inclusion of Black farmers in the original low-THC cannabis program.
Howard Gunn is a Black farmer in north Florida who has advocated for members of the Pigford class, although he was not part of that lawsuit himself. He’s disappointed with the fee, saying it will be hard for farmers to find $146,000 for an application.
Gunn said he’s also not surprised. But, “we want the license to go to a Black farmer as quickly as possible,” Gunn told Cannabis Wire. “If we have to jump through these hoops, we’ll do so and deal with it on the other end.”
There are about 2,000 Black farmers in Florida, according to the latest Census of Agriculture from 2017. It’s estimated only about 100 are qualified members of the Pigford class.
“Some of our Pigford litigants are deceased now,” Gunn said. “They started off with us, were in Tallahassee with us, on the Senate floor when we spoke for the inclusion of the Black farmer.”
It’s also possible that the license could go to a Pigford class member who was outside of the state when they settled the lawsuit. The medical cannabis law originally stipulated that the farmer had to be a member of the Florida chapter of the Black Farmers and Agriculturalists Association, but that provision was removed in 2018. The 70-page application instructions only say that if the applicant is an entity, that entity must prove it has done business in the state for the previous five years.
Observers aren’t exactly impressed with Florida’s effort. In its 2022 national equity report, the Minority Cannabis Business Association contended that Florida’s reserved license for a single Black farmer didn’t meet the threshold for a social equity program. It also cites the high application fee and notes that the state’s requirement for applicants to have a strong diversity plan, such as including and recruiting people of color and veterans in the workforce, is too vague.
Florida is hardly the only state to fall behind on equity in the medical cannabis industry, according to the report. The Minority Cannabis Business Association says thirteen of the eighteen states where adult use is legal have social equity programs. Only two of the eighteen medical-use states have them.
Vertical integration is another barrier to greater diversity in Florida’s market, according to critics. They say the arrangement pushes out small businesses that are unable to manage the cultivation, processing, transportation, and sale of cannabis on their own. Instead, it leaves big industry players with plenty of money at their disposal with a leg up. Even Governor Ron DeSantis has compared the industry’s setup to a “cartel.”
State Representative Kevin Chambliss of south Florida would like to see the industry accessible to more than just established farming families, and believes eliminating vertical integration would help. He says there should be a way to get more people in Black communities involved at various points in the supply chain. “We’re talking about millennials who want to invest in property. We’re talking about distribution,” he told Cannabis Wire. “We want to make sure that we’re introducing and that we’re opening those opportunities up to more people in general.”
Chambliss compares medical cannabis to the hemp industry, which he said is booming in south Florida but allows people to get involved in ways that don’t require growers to be manufacturers and distributors as well.
Nikki Fried, Florida’s Agriculture Commissioner, is a Democratic candidate for governor in 2022 who has criticized DeSantis on his cannabis policies, including for the late arrival of a license for a Black farmer. But the two agree when it comes to breaking up the vertical integration scheme.
Fried, a former industry lobbyist and a supporter of legalization, told Cannabis Wire that new license holders have an especially daunting task in entering an industry where some players have a five-year head start. “We have some pretty large international players in the state of Florida who are highly capitalized, and any newcomer in the industry needs to expect to be throwing in hundreds and hundreds of millions of dollars for their operation just to potentially be competitive.”
Fried said even after the state selects an applicant, it may not mean they start up business anytime soon. “That doesn’t mean that there won’t be lawsuits that will happen afterwards that could prevent the actual issuance of the final license,” she said.
For many Black farmers looking to be part of Florida’s billion-dollar “green rush,” the Department of Health’s handling of this license has capped a frustrating process that held promise in the early days of the state’s cannabis industry.
“Florida could have been the poster child for what to do that’s right with diversity,” Gunn said. “They could have done the right thing from the start but they chose not to. And this is where we are seven years later.”