The cannabis industry is budding as some sales projections are expected to exceed $1.7 billion by 2022. Licenses to sell medical marijuana in Florida repeatedly fetch a price tag of over $40 million. The catch: Florida tightly regulates the amount of licenses it issues for the sale of medical marijuana. Therefore, companies that desire to enter the market resort to purchasing the license from an existing license holder. However, that may soon change.

On Oct. 16, the Florida Supreme Court accepted review of a case that involves a key component of Florida's regulatory structure for medical marijuana licenses. Gov. Ron DeSantis' office asked the Supreme Court to take up the case, which would address the frameworks of Florida's vertical integration requirement for cannabis companies.

As of 2019, Florida issued just 14 licenses to produce and sell medical cannabis in the state of Florida. These licenses, also known as a MMTC license (formerly a dispensing organization license), allow the license holder, to own and operate up to 25 to 30 individual—dispensary locations and deliver product directly to customers' homes. Florida law tightly regulates the licensed medical marijuana treatment clinics (MMTCs). Specifically, Florida statute requires each MMTC license holder to be vertically integrated, which requires the license holder to control all aspects of the operations from "seed to sale." In short, the statute requires a medical marijuana treatment clinic to cultivate, process, transport and dispense marijuana for medical use. However, the recent ruling from the Florida's First District Court of Appeal determined that the vertical integration requirement conflicted with the Florida Constitution. Art. X Section 29(b)(5). The Florida Constitution permits MMTCs to cultivate, process, transport, sell, distribute, dispense or administer marijuana for medical use. Since the statutory language conflicts with constitutional amendment regarding vertical integration, the statutory cap on the number of facilities is subsequently rendered unreasonable.