Medical marijuana in the state of Florida is a real-life game of Monopoly, but one where a few players already have all the properties in hand before the first die is thrown.
While other states where cannabis is legal allow for competition among those who produce and sell medical marijuana—a lucrative position to be in, we’re told time and again—Florida allows a mere seven companies to hold the exclusive rights to produce and sell all the cannabis in the state. That’s a corner of the market that will serve a population of 21 million people (many of them senior citizens, one of the very market segments the cannabis industry is expecting to expand dramatically)—and they’re in this position, holding all the railroads as well as all the key properties from Baltic to Boardwalk, thanks to state government.
The Miami New Times is bringing attention to this “de-facto monopoly”—which is also attracting international attention from ambitious would-be international cannabis conglomerates.
Two Florida medical marijuana license-holders have been recently bought out by out-of-state investors: Chestnut Hill Tree Farm, purchased for $25 million by Aphria, one of the Health Canada-licensed medical marijuana firms; and Miami-based Costa Nursery Farms (the only licensed cannabis grower in Florida’s biggest city), bought out by Palliatech, which is based in Massachusetts.
They may not have been in this position were they in Colorado, where more than 500 licensees grow medical cannabis, or in California, where there is no official statewide cap on the number of medical cannabis cultivation and sales permits.
Thus far, however, there has been no move by the Florida legislature—which is tasked with shaping the state’s medical marijuana industry following the overwhelming approval of allowing sick people to access cannabis at the November ballot—to allow more companies to enter the sector.
This is a dream come true for the few individuals already holding permits—granted under a CBD-only law that was in place prior to the popular vote—who are now “shopping ownership” of their licenses to “high-net worth” individuals, as the Miami Herald reported. Some companies are seeking equity stakes north of $10 million, with valuations of their companies in the hundreds of millions, according to the New Times.
This unfortunate (if you’re a consumer) situation hasn’t gone unnoticed by medical marijuana advocates, some of whom are comparing the government-created landscape to a “cartel.” While no massive price gouges have come to pass yet, it’s capitalism 101—corner the market, raise prices and watch yourself become stupendously rich.
“Which begs the question,” Ben Pollara, the campaign manager for United for Care, the organization behind Florida’s successful medical marijuana ballot measure, told the newspaper, “which licensee is El Chapo looking at buying?”
It also begs the question, “What are Florida’s elected officials thinking?” As Pollara told the New Times, they appear to be thinking that it’s all cool and very good.
At a recent Senate committee meeting, one senator cited the massive out-of-state investments as justification for the near-monopoly. If more licenses were added and competition suddenly appeared, those investors’ holdings would suddenly become less valuable, he said. (And who are these investors? As the New Times’s Tim Elfrink points out, one of them is Boris Jordan, a Russian emigre who is a chief defender of Vladimir Putin—always a great look in 2017 America.)
Meanwhile, the legislative priorities in Florida are laughable.
One bill pushed in the legislature would outlaw smokeable and edible cannabis. Suggestions to add more licenses have been squelched.
“I’ve never seen anything like the absolute greed going on here,” an anonymous medical marijuana industry insider told the New Times. “I’ve never seen anything as bald-faced.”
Sure, you have. You just have to go a ways back to see it.