‘Free Market’ Marijuana Changes Could Be Hard Sell

He’s not calling it a cartel, as Gov. Ron DeSantis did.

But House Speaker José Oliva acknowledged this week that the state’s “vertically integrated” medical marijuana system – which requires operators to grow, process and dispense cannabis and related products – “isn’t terribly free market.” 

“I couldn’t possibly be a defender of free markets and call that structure a free market,” the Miami Lakes Republican, who made his fortune in the cigar business, told reporters Wednesday at an Associated Press event at the Capitol.

Along with vertical integration, the system includes limits on the number of potentially lucrative licenses for medical-marijuana businesses. The industry has quickly grown after voters in 2016 approved a constitutional amendment making the marijuana treatment available to a broad swath of patients.

“The limiting of licenses and the limiting of dispensaries is probably the greatest affront to the free-market argument,” Oliva added.

Whether the Legislature will agree to change the current system during this year’s legislative session, however, remains a mystery.

When asked about revisiting the state’s regulatory structure, Senate President Bill Galvano gave a tepid response.

“I expect that bills will be filed in that regard,” Galvano, R-Bradenton, said.

Oliva is known for taking free-market stances on issues such as health care. But he did not take a firm position on dealing with marijuana regulations during the session, which starts March 5.

“I’m not entirely sure that that’s not something that we will be revisiting this year, because it affects access and it could certainly affect price,” Oliva said. “We’re still trying to get an idea of what kind of demand there really is for this. But I wouldn’t disagree. … It hasn’t been a terribly free-market process.”

Shortly after taking office, DeSantis bashed vertical integration and the caps on licenses, including likening the system to a cartel. Moving away from vertical integration could involve opening the industry to companies that wouldn’t be responsible for all aspects of the cannabis business. For example, some companies could operate solely as dispensaries or as growers.

But this week, DeSantis appeared to walk back his opposition to those issues, focusing instead on his demand that the Legislature do away with the state’s ban on smokable medical marijuana.

Medical marijuana licenses have sold for tens of millions of dollars, including one transaction in which a license sold for $63 million in cash this month. When asked if doing away with vertical integration would destabilize the market, Oliva replied, “If the question is, would having a more free-market approach destabilize the private market, in particular, the value of these licenses, well, sure, that’s what markets do.”

“If the question is, will it destabilize the market and its ability to bring forth products that are safe and traceable and consistent, I don’t think it will do that. So, yeah, if you put more houses on the market, chances are you’ll have to lower the price of your house,” he concluded.

DeSantis has focused heavily on eliminating the ban on smoking medical marijuana, a prohibition that was included in a 2017 law carrying out the constitutional amendment. A Leon County circuit judge ruled that the smoking ban was unconstitutional, and former Gov. Rick Scott’s administration took the issue to the 1st District Court of Appeal.

The new governor has threatened to drop the appeal if lawmakers don’t eliminate the smoking ban. But Oliva is not keen on allowing patients to smoke marijuana.

“Is one to believe that an 8-year-old child should be smoking marijuana and inhaling smoke into their lungs? I’ve been in the smoke business my entire life, and I’ve never heard anyone say it’s good for you,” he said.

The speaker indicated he thinks the push to allow smoking is part of an effort to open the door to legalizing recreational marijuana.

“Is medicine a façade and a masquerade for recreational marijuana? If it is, that won’t be very supported by the House. If we really want to look at marijuana, and what ailments it can truly relieve and people it can actually benefit, then that’s what we’re looking at,” Oliva said.

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