TALLAHASSEE, Florida — Florida is all about freewheeling fun in the sun — except when it comes to marijuana. And the state’s pot businesses are learning that the hard way.
When the Florida agency responsible for approving medical marijuana licenses began accepting applications for 22 state licenses for selling and growing, applicants envisioned a market destined for adult recreational use, with heavy federal restrictions dialed back.
But three years later, those dreams seem long gone, with an initiative seeking to permit recreational pot in limbo, tighter restrictions brought by Gov. Ron DeSantis, and little federal headway in Washington.
“It’s going to be a challenge, and I think expectations have been moderated,” said Jeffrey Sharkey, president of Medical Marijuana Business Association of Florida. “There was always a sense that some of them would sell, but the value is too low to be worth it.”
Florida’s 2017 medical marijuana law creates four new licenses each time the state’s population of active, doctor-verified patients grows by 100,000. But even as the patient population grew rapidly — exceeding 900,000 patients now — the state’s application process was delayed by litigation challenging key components of the actual process in the state Supreme Court in 2021.
The Office of Medical Marijuana Use restarted the application process in April 2023 for 22 licenses and announced the winning applicants in November 2024. This decision prompted some of the losing applicants to file at least 11 legal challenges, with the judge involved promising to deliver a ruling on May 11.
Even though Administrative Hearing Judge Mary Creasy’s eventual ruling faces the likelihood of appeal, it marks a significant step for the winning applicants in finalizing the license and eventually opening for business.
Gary Stein, the policy director for NORML Suncoast, said the state’s latest round of applicants picked by OMMU to eventually receive a license will face competing companies that have grown to become weed purveyors in multiple states. Trulieve, which opened its first dispensary in Tallahassee shortly after the state program began in 2017, has since become the largest multi-state industry operator in the country.
“It’s already insurmountable, and now people are trying to get these new licenses, and after waiting so long, they realize they’ve run out of time,” Stein said.
Sharkey said the companies picked to receive the licenses are already contemplating the reality of Florida’s current market. The Office of Medical Marijuana Use began taking applications for the licenses in 2023 as Trulieve had just begun pouring roughly $150 million into a recreational use campaign. At the same time, state lawmakers were poised to crack down on raw hemp that had been synthesized in a lab to become THC, only without the hundreds of dollars in doctor’s bills and annual program fees medical marijuana patients are required to spend.
Now, Trulieve’s recreational campaign has been put on ice until at least 2028 after it failed to make this year’s ballot. And efforts by state lawmakers to pass basic regulations on hemp products meant to compete with medical marijuana have died amid immense pressure from the hemp industry.
Congress legalized hemp in 2018 with strict limits on THC, also known as Delta 9. But federal lawmakers also failed to ban other chemicals found in the plant, such as Delta-8, which can be altered to provide the same effects as pot. President Donald Trump signed new language into law meant to close the “hemp loophole” in December, but the products are still available in some stores and online.
“There's a maturation of an understanding of the marketplace much more so than three years ago,” Sharkey said. “There was a robust belief that these licenses were going to be a lot of money, but that has tapered down quite a bit.”
State regulations also required the 22 applicants to maintain storefronts and other properties they included in their application while the administrative court litigation continued. Covering those expenses as well as spending up to $15 million on keeping the grow facilities, factories and dispensaries open in the first two years, may lead some applicants to retool business plans so they are not directly competing with long-established competitors. Sharkey said licensees have discussed ideas such as focusing on age groups or emphasizing health benefits of pot.
“The licensees, at least the ones I’ve spoken to, are very excited to get started,” Sharkey said. “But they’ve got to have a very targeted business plan.”
Sharkey said one lucrative alternative to opening a medical marijuana company in the first few years of the program was to sell the license, but the prices they once fetched are long gone. For instance, in 2018, the Phoenix-based Harvest Health and Recreation Inc., which later merged with Trulieve, purchased a Florida license for $70 million. They now go for less than $10 million.
“This definitely is not the old days,” he said.
Increasing regulatory control in Florida played a significant role in driving down the value of the licenses. DeSantis, who called on the Legislature to lift a ban on smokable medical pot three weeks after he first took office in 2019, increased renewal fees from roughly $60,000 to more than $1.2 million. And the state Office of Medical Marijuana Use, which the governor’s office oversees as part of the state Department of Health, recently made emergency rules with tighter marketing restrictions.
Sally Peebles, who advises prospective license applicants for the Vicente law firm office in Jacksonville, said even with the increased fees and tighter controls, the market still has immense potential, particularly should recreational use ever be allowed in the nation’s top vacation destination.
“Those quick flip days? They’re long gone,” Peebles said, adding some of the applicants diverted cash and other resources earmarked for Florida to growth opportunities in other states.
“A lot of these teams asked, ‘Why don’t we pivot to something else?’” Peebles said.
Peebles said applicants will also weigh any potential end to the federal ban on pot, and ongoing talks about abolishing the high taxes paid by pot companies, which the IRS created for illicit drug dealers. But even with those considerations and staunch opposition from Florida Republican leaders, the industry plans on sticking around the Sunshine State.
“They may not be here in the state now, but they’ll be back,” Peebles said. “Florida’s industry will be there.”
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