Trulieve, the backer of an initiative to legalize cannabis for adults in Florida, has made a costly bet to get the measure on the 2024 ballot. If the company succeeds, it will open up one of the most lucrative cannabis markets in the country. It will also be a boon for the companies operating in the state’s medical cannabis market. Trulieve is, by far, the biggest player in the state, making up 40% of medical cannabis sales.
The initiative has received the signatures necessary to appear on the 2024 ballot. Next, it has to pass muster at the state Supreme Court. That will be an uphill battle. In 2021, the court shot down two different adult-use ballot measures. The justices deemed both to be misleading.
Political opposition has made the challenge even greater. After sending the initiative to the state Supreme Court for review, state Attorney General Ashley Moody submitted an advisory opinion to the court outlining her opposition to the measure appearing on the ballot. Moody argues that the initiative, like past attempts, is misleading, in part because voters might think it makes cannabis legal on the federal level. In 2020, Florida lawmakers passed a bill that allows the state Supreme Court to assess a ballot measure’s validity under the U.S. Constitution.
Proponents argue that language in the measure clears this up. It reads, “Nothing in this section changes federal law or requires the violation of federal law or purports to give immunity under federal law.”
Moody and her office were offered a chance to reply to supporters of the initiative, including a brief from the ACLU of Florida. In her response, the attorney general argues that with the measure, Trulieve would entrench its “monopolistic stranglehold on the marijuana market to the detriment of Floridians.”
“In its pursuit of a larger customer base and greater profits, Trulieve has invited millions of Floridians to join it in reckless violation of federal criminal law,” Moody goes on. “In response, the Sponsor declares that it ‘strains credulity well past the breaking point to think that the average voter is unaware that marijuana is illegal at the federal level.’ But most Americans cannot name a single Supreme Court justice.”
Trulieve, which is not only the biggest cannabis operator in the state but also one of the largest in the U.S., has invested an unprecedented amount of money into the legalization petition drive in Florida—$39 million just in the signature gathering phase. The drive, sponsored by Smart and Safe Florida, succeeded in that stage, submitting more than a million signatures.
Trulieve’s contribution, which accounts for the entirety of funds raised, with the exception of two individuals that gave $125, far outpaces recent efforts to legalize cannabis for adult use in other states. Signature gathering for measures in four states in 2022 ranged from $68,000 to $3.66 million, according to Ballotpedia. The site says the average cost for a successful initiative signature drive on other issues in Florida in 2020 was $6.7 million.
Trulieve’s contribution also tops the amount raised for the entire 2016 campaign to legalize cannabis in California, which amounted to $22.8 million.
Backers of the Florida campaign say the large war chest is needed because of changes in Tallahassee that make it harder to get measures on the ballot. A 2019 law requires campaign workers to register with the state in order to collect signatures. It also requires signature gatherers to be paid by the hour rather than by signatures collected.
“You used to be able to pay people by the petition. Well, that had them highly motivated to get a lot,” Steve Vancore, president of the consulting firm Vancore Jones, told Cannabis Wire. Vancore is a spokesperson for Smart and Safe Florida. His firm also works with Trulieve. “Now you have to pay them by the hour, or a salary, and so they’re not as motivated.”
Most of Smart and Safe Florida’s expenditures have gone to political consulting firms well known for their work with Republican candidates. Axiom Strategies, which has ties to Texas Sen. Ted Cruz and other Republicans, has received $13.1 million from the Smart and Safe Florida campaign. The company’s founder, Jeff Roe, runs the Never Back Down PAC, which is backing Gov. Ron DeSantis’s run for president. Axiom Strategies’ subcontractor Vanguard Field Strategies, which specializes in signature-gathering campaigns, has received $15.6 million so far.
Big Profits On the Line
Trulieve and other companies operating in the state are poised to be first in line to profit if the initiative passes. The measure “allows Medical Marijuana Treatment Centers, and other state licensed entities, to acquire, cultivate, process, manufacture, sell, and distribute” cannabis for non-medical reasons.
Florida’s adult use market would be big. An estimate from 2019 found that retail sales in the first year of legalization could yield $1.7 billion. That estimate was included in a financial impact statement for the initiative from the Office of Economic and Demographic Research, which was submitted to the Attorney General and Secretary of State last month.
Trulieve is one of 24 licensed medical cannabis operators in Florida but plays an outsized role in sales. It has nearly twice as many dispensaries as the next biggest retailer in the state, and controls 40% of the market. The company is clearly excited about the prospects of legalization in the state, and might even be banking on it for future growth.
“The adult use opportunity in Florida is the most significant near-term catalyst for Trulieve,” Trulieve CEO Kim Rivers said on a May 10 earnings call, touting its support for the Smart and Safe Florida campaign. The company’s own estimates for sales are significantly greater than the state’s estimates. “With 22 million residents and 138 million annual tourist visits, we believe Florida will be a top legal cannabis market, reaching $6 billion in annual revenue…Given our leading market share, scale and service, and ability to swiftly flex up production with minimal investment, Trulieve is uniquely positioned for this opportunity.”
For comparison, California reported $5.4 billion in taxable sales in 2022. On that same call, the company, which has laid off dozens of workers this year, reported a net loss of $64 million in the first quarter of 2023.
The profitable upsides for Trulieve make its reason for investing in this campaign obvious to observers like Aubrey Jewett, assistant director and associate professor in the School of Politics, Security, and International Affairs at the University of Central Florida.
“They probably will spend $20 million or more to advertise the proposed amendment if it gets on the ballot,” Jewett wrote in an email to Cannabis Wire. “While this is an enormous amount of money, Trulieve could make that all back plus a large profit in the first full year of recreational marijuana sales – and then they would keep raking in the money for decades.”
Trulieve did not respond to a request for comment.
Missing from the initiative is the lawful ability to grow cannabis at home, meaning people will have to go to dispensaries to purchase cannabis and cannabis products. Tampa attorney Michael Minardi was chairperson of Regulate Florida, which attempted to put a measure on the 2022 ballot allowing for home cultivation of cannabis. It was shot down by the state Supreme Court. Minardi told Cannabis Wire he’s disappointed home cultivation is not part of the Smart and Safe Florida initiative but says it’s likely necessary so it doesn’t run afoul of the single subject rule for ballot measures.
“Anything that pushes forward legalization, that stops people from getting arrested and incarcerated, I think, is 100% a good thing,” Minardi said.
Other groups have also expressed frustration with the initiative.
“It does not change the social equity imbalances in the system,” Chris Cano, executive director of Suncoast NORML told Cannabis Wire. “It does not allow for mom and pop shops. It definitely doesn’t open it up to being a true free market system.”
However, like Minardi, Cano supports the measure because of its criminal justice impacts. He says it also could be critical to pass the measure in 2024 because of potential changes to the voter initiative process in Florida. In recent years, lawmakers have added barriers to getting measures on the ballot. And during the 2023 legislative session, lawmakers proposed increasing the threshold for passing initiatives from 60% to 66.67%. The bill passed in the House but died in the Senate.
If that legislation comes up again in a future session, Trulieve and other MMTCs could see their window to pass an adult-use voter measure narrow, too. In that case, the legislature might be the only means for legalization. But lawmakers have shown no signs of supporting adult use legislation anytime soon.
Richard Blau, a Tampa attorney who specializes in cannabis industry issues, says companies like Trulieve want to put themselves in the right position if cannabis legalization for adults comes to Florida. An industry-supported initiative would be the best means for that.
“They will definitely want to have input into whatever decisions are made with regard to adult use of recreational marijuana legalization to make sure that their investments are protected,” Blau told Cannabis Wire. “And that the value of their licenses are not diminished by a change in the law.”