Florida Wrongfully Denied Medical Marijuana Treatment Center Licenses, Again

Florida Wrongfully Denied Licenses to Dispense Medical Marijuana, Again

Following the case we discussed last week, Plants of Ruskin v. Department of Health, (“DOH”), the DOH has gotten itself in more trouble. During a special session held by the legislature in 2017, section 381.986, F.S., was significantly amended establishing a licensing protocol for 10 new Medical Marijuana Treatment Centers (“MMTCs”) by October 3, 2017. This amendment instructed the DOH to license any applicant that met the following criteria:

  1. any applicant whose application was reviewed, evaluated, and scored by the department and which was denied a dispensing organization license by the department under former section 381.986, F.S.;
  2. which had one or more administrative or judicial challenges pending as of January 1, 2017, or had a final ranking within one point of the highest final ranking in its region under former section 381.986, F.S.;
  3. which meets the requirements of this section; and which provides documentation to the department that it has the existing infrastructure and technical and technological ability to begin cultivating marijuana within 30 days after registration as a medical marijuana treatment center.

After the amendment, several nurseries informed the DOH that they met the criteria listed above, however, the DOH again denied several of these nurseries requests for licenses to dispense medical marijuana. Two, of the many, nurseries that went through this process are Keith St Germain Nursery Farms and Natures Way Nursery of Miami Inc. The two nurseries cases were consolidated once they were referred to the Division of Administrative Hearings (“DOAH”). The main issue in this case was whether the Department was following an unadopted rule in its method of scoring the applications. These unadopted rule challenges may have been a result of the ALJ’s claims of an unadopted rule in his prior opinions on the issue, one of which was discussed in our blog last week. The presiding officer informed Keith St Germain Nursery that she would refer the case to DOAH, and then waited several days to actually refer it. This stalling method gave the DOH time to adopt an emergency rule in an attempt to make the Keith St. Germain’s unadopted rule challenge moot. After adopting emergency rule, 64ER17-3, the DOH then filed a Motion to Reconsider the presiding officers prior ruling that the case should be transferred to DOAH. Then, the DOH’s agency clerk entered an order deciding that the unadopted rule challenge was moot and suggested DOAH had no jurisdiction over the case. Interestingly, Keith St. Germaine filed a public records request in an attempt to ascertain activities occurring within the DOH and the very next day the presiding officer suddenly resigned. The case ended up going to DOAH.

This was a very interesting case because the Department created so many issues for itself in its attempt to convolute the nurseries claims and to stop this case in its tracks as it knew it was wrong all along. The DOH even attempted to disqualify the Administrative Law Judge (“ALJ”) assigned to all of the cases regarding the issue of licensing medical marijuana dispensaries. The DOH tried to disqualify the ALJ based on what he had said or done in other cases which does not constitute adequate grounds for disqualifying a judge in Florida. Specifically, the DOH attacked the ALJ’s analysis in the Plants of Ruskin case (discussed last week) where the ALJ stated that the DOH fundamentally erred in ranking as opposed to scoring applications. Interestingly, the DOH essentially adopted the ALJ’s analysis in recent emergency rule 64ER17-1, wherein the DOH now scores applications quantitatively rather than ranking them. This action begs the question, if the ALJ’s analysis was so wrong then why did the DOH follow the analysis in adopting a new rule.

Ultimately, the ALJ was not disqualified and one of the nurseries, Keith St. Germaine Nursery Farms, settled. The other nursery involved in the case, Nature’s Way Nursery of Miami, did not settle. The case was originally set for hearing on November 17, 2017, but has been continued. The nursery has filed for mandamus with the 1st District Court of Appeals (“DCA’s”) and has requested for the case with DOAH to be continued until after the 1st DCA’s opinion.

If you are a nursery that applied for a license to dispense medical marijuana and were wrongfully denied like these nurseries, contact us. We can help you to get the license you rightfully deserve. We have recently successfully challenged an agency action as an unadopted rule and won back thousands of dollars for our clients. In one specific case, Brandy’s Products, Inc. v. Dep’t of Bus. & Prof’l Regulation, the challenger, Brandy’s, filed a refund claim for tax wrongfully paid that was then wrongfully denied by the state agency. The issue in this case was that the agency was requiring Brandy’s and others to pay other products tax on a product that did not fall within the definition of other tobacco products, blunt wraps. Brandy’s then filed a Petition for Administrative Hearing and received a favorable recommended order from the same Administrative Law Judge (“ALJ”), Judge John Van Laningham, that heard the medical marijuana cases discussed above. However, the agency rejected the ALJ’s recommendation and issued a final order again wrongfully denying Brandy’s of money that it was rightfully due. Brandy’s then appealed the case to the First District Court of Appeals, where the Judges agreed with the ALJ and held in favor of Brandy’s, awarding Brandy’s its refund claim.

In his law practice Mr. Donnini's primary practice is multi-state sales and use tax as well as state corporate income tax controversy. Mr. Donnini also practices in the areas of federal tax controversy, federal estate planning, Florida probate, and all other state taxes including communication service tax, cigarette & tobacco tax, motor fuel tax, and Native American taxation. Mr. Donnini obtained his LL.M. in Taxation at NYU. Mr. Donnini is licensed to practice law in Florida. If you have any questions please do not hesitate to contact him via email [email protected] or phone at 954-639-4496.