Cannabis industry fights for Florida
How the battle for recreational marijuana is gaining steam in the Sunshine State.
The battle for recreational marijuana is gaining steam in the Sunshine State.
The battle to legalize the medical use of cannabis in Florida was a contentious one. Yet, nearly eight years later, the industry is big business – and poised to become even bigger.
The Sunshine State has quickly become one of the country’s largest markets for medical marijuana since 2016, with almost 900,000 registered patients. Now, cannabis dispensaries could gain millions of new customers if voters decide in November to legalize marijuana for recreational use.
If the ballot initiative, known as Amendment 3, passes, Florida would become one of the world’s largest – and likely one of the most lucrative – markets for legal marijuana. The state’s cannabis economy could triple to $6 billion and add thousands of new jobs as a result, according to data analytics firm Headset.
But not everyone supports the effort.
Gov. Ron DeSantis has repeatedly voiced his objections to recreational cannabis. The Republican Party of Florida issued a resolution against the effort, arguing it will harm tourism and “benefit powerful marijuana special interests.”
Meanwhile, polls indicate a majority of registered voters in Florida say they are in favor of legalizing marijuana. Stakeholders hope the trend will be enough to pass the voter referendum later this year.
Cannabis businesses are already making expansion plans in anticipation.
“With 22 million residents and 138 million annual tourist visits, we believe Florida will be the best cannabis market in the world,” said Kim Rivers, CEO of cannabis dispensary chain Trulieve, during a recent quarterly earnings call with investors.
Marijuana companies bullish on business growth opportunities in Florida
Cannabis businesses are the driving force behind Amendment 3.
Tallahassee-based Trulieve, the largest chain in the state with 136 locations, was the main backer of the Smart & Safe Florida campaign, a political action committee lobbying for recreational cannabis. The company has bankrolled the effort along with other large operators such as Curaleaf.
The law would allow existing medical marijuana dispensaries to sell to adults 21 or older, and permit possession of up to 3 ounces for personal use. It bans people from growing the plant at home. The initiative must receive at least 60% of voter support to pass.
Although recreational consumption is not legal, Florida already has a substantial cannabis market. The state is home to 636 licensed dispensaries to serve patients with a valid prescription from a doctor.
But there are only so many people who qualify for the medical program, even in a large state like Florida. While new registrations initially exploded, that growth is now slowing.
In an email interview, Rivers acknowledged that recreational use would be a boon for industry businesses. However, she said changing the law will also have social justice and economic benefits.
“No one should be in jail for simple possession of marijuana,” she said. “Florida taxpayers will benefit from the cost reduction of our state no longer prosecuting residents for simple possession.”
There’s no denying that large cannabis operators see opportunity here. Las Vegas-based Planet 13 recently acquired VidaCann, a Florida company with 26 dispensaries, to accelerate its entrance into the market. If the recreational use law passes, it aims to open superstores in popular tourism destinations such as Orlando and Miami, CEO Bob Groesbeck said.
“Four of the nation’s fastest-growing metro areas are in Florida, so having a strong presence here is a no-brainer,” he added.
Competition for Florida cannabis licenses is heating up
Big cannabis companies are eager to plant their stake in Florida, as dispensaries vie to secure a piece of the market through acquisitions or purchasing one of the state’s limited medical marijuana licenses.
The waiting list to secure a license is long.
So far, the state has only issued 24 licenses, making each one incredibly valuable. Florida’s vertical integration model requires businesses to cultivate, process and sell the product in their own retail stores to qualify, an expensive endeavor that means only the best-funded businesses can compete. Once a company has a license, there’s no cap on the number of dispensaries it can open.
“That’s part of what makes Florida such a sought-out market,” said Paula Savchenko, an attorney who specializes in helping multistate cannabis businesses secure licenses.
The openings of dozens, if not hundreds, of new dispensaries each year is one reason the state was already home to more than 30,000 cannabis industry jobs in 2023, according to a report from job platform Vangst.
The passage of Amendment 3 would create thousands of additional jobs at cultivation facilities and retail locations, supporters say. According to Smart & Safe Florida, recreational sales would also generate millions of dollars in new tax revenue.
“This is an opportunity to increase funding for education, public safety and other state programs,” spokesperson Morgan Hill said.
Recreational use would also help crack down on the industry’s main competitor: the thriving black market.
Illicit sellers aren’t just cutting into official dispensary sales. They’re also distributing untested, and potentially hazardous, products, Smart & Safe Florida reports. Marijuana from illegal sellers usually isn’t tested for heavy metals, pesticides and other common contaminants – something licensed dispensaries are required to do.
“It’s important for public health and safety, and it’s also important to have legal programs that can compete against an illicit market that does not pay taxes,” said Adam Goers, senior VP of corporate affairs at The Cannabist Company, formerly known as Columbia Care.
Florida legislation for recreational weed could boost sales, locations for businesses
Cannabis businesses were quick to celebrate when news broke that Amendment 3 will be on the Florida ballot in November.
The industry received another win in May, when the U.S. Department of Justice announced it would reclassify marijuana from a Schedule I to Schedule III substance. As a Schedule I drug, cannabis is defined as having no medical applications and a high potential for abuse.
When the change is enacted, cannabis businesses will be able to deduct the cost of ordinary expenses, boosting cash flow for those ventures. Universities and pharmaceutical companies will also have more opportunities to conduct medical research to understand the long-term health impacts of using the substance.
The reclassification is the most promising sign that federal legalization of marijuana could eventually be more than a pipe dream.
For now, in Florida, the focus is November.
The passage of Amendment 3 won’t be easy. While more than a dozen states have legalized recreational marijuana through a ballot initiative, only three (New Jersey, Maryland, Arizona) and Washington, D.C., managed to do so with at least 60% of voter support.
“Businesses are preparing for the best outcome, but I think they’re ready for anything that might happen,” attorney Savchenko said. “If recreational use fails, it will be upsetting. But the industry will quickly get back up on its feet and look for its next initiative.”
