Big Pot vs. Big Government in Florida

It might seem at odds with Florida’s hard-partying reputation that uptight states like Virginia and Missouri legalized recreational pot before it did. After all, Florida is a place where sea turtles get entangled in floating bales of cocaine and the Legislature recently named a highway after Jimmy Buffett. Yet Florida Man still can’t get high for fun—at least not legally.

The reason the Sunshine State is one of the last major holdouts for cannabis prohibition is because it is also one of the toughest states to pass a constitutional amendment. Amendments require a 60 percent supermajority vote to be ratified. It’s the highest bar in the country among states with a ballot initiative process, and it has proven fatal to previous legalization campaigns. The first time marijuana legalization was on the Florida ballot, in 2014, it failed even though 57 percent voted for it.

Florida voters then legalized medical marijuana in 2016 with a resounding 71 percent, although the state Legislature didn’t pass a law allowing medical card holders to smoke cannabis until 2019. From the consumer side, the current medical marjuana system is relatively painless, as long as you can afford the semiannual doctor consultations and state fees, have one of the qualifying conditions, and can jump through a few government hoops.

In other words, it’s no problem for the state’s many retirees. When Florida medical marijuana treatment centers, known as MMTCs, have big sales, you can see golf carts zipping into the parking lots and long queues of silver-haired patients waiting to pick up their orders.

The situation may soon change, thanks to Amendment 3, a ballot initiative that seeks to legalize recreational marijuana, allowing adults 21 and older to possess up to three ounces of marijuana and five grams of concentrated THC, which is commonly sold in the form of oil, wax, or resin. At least at first, only existing MMTCs would be allowed to sell recreational marijuana; the amendment would permit but not require the state Legislature to expand licensure outside of MMTCs. The measure has no provisions for home cultivation, for expungement of marijuana convictions, or for the “social equity” requirements that have popped up in other states.

The measure pits the most well-funded marijuana legalization campaign in U.S. history against the most powerful governor in modern Florida history. On one side is a group of multistate marijuana companies with a $60 million war chest. On the other is Gov. Ron DeSantis, a Republican dedicated to using the sheer force of government to make the state a bastion for culture-war conservatives. DeSantis also has one unusual ally: the state’s hemp industry, which would rather take its chances with Florida Republicans than get locked out of the recreational market.

Polls show that a solid majority of Florida voters in both major parties favor legalization. Even Florida resident Donald Trump announced his support for Amendment 3 in September. But thanks to the high bar for constitutional amendments, that once again may not be enough.

Riding on how Floridians vote in November are thousands of marijuana arrests a year and millions upon millions of dollars in profits for the couple-dozen companies that would be grandfathered into an exclusive new recreational market.

The stakes and the players involved in Amendment 3 are quintessential Florida. It all could have been ripped straight from the state’s history books: a campaign bankrolled by rent-seeking carpetbaggers who stand to get rich off the fact that even a system rigged in their favor is still preferable to the status quo. It’s Big Pot versus Big Government in the nation’s most famously zany state.

Longtime legalization advocates aren’t thrilled about the protectionist aspect of the amendment, but they also see an opportunity to take one of their biggest remaining targets off the board. “I think in a lot of ways it’s very clearly a money grab,” says Morgan Fox, political director of the National Organization for the Reform of Marijuana Laws. “But it’s also a money-grab that is going to stop thousands of people from getting arrested every year.”

‘You Will Be Able To Bring 20 Joints to an Elementary School’

Amendment 3 has at least one clear advantage over the 2014 ballot measure: It arrives after legalization has already spread across the country and prohibitionists’ most dire predictions have failed to materialize. Teenage drug use has flatlined or declined, so culture-war conservatives, including DeSantis, have turned to another argument: Weed stinks.

“I’ve gone to some of these cities that have had this everywhere, it smells, there’s all these things,” DeSantis said at a press conference earlier this year. “I don’t want to be able to go walk in front of shops and have this. I don’t want every hotel to really smell.”

DeSantis’ complaints have veered into the hysterical: “I think you’re going to see people—you will be able to bring 20 joints to an elementary school,” he complained. “Is that really going to be good for the state of Florida? I don’t think so.” He has also griped about the expansiveness of the measure. “It is the broadest language I’ve ever seen. It seems to supersede any other regulatory regime that we have,” DeSantis said. “People in downtown areas and other communities, this is going to be part of your community.”

That is not true. The amendment does not limit the state Legislature or local governments from creating licensing regimes or time, place, and manner restrictions on marijuana businesses and consumption. In fact, the Hialeah City Council passed a resolution earlier this year vowing “to maintain a social, smoke-free social environment within the city” if Amendment 3 passes.

The main reason Amendment 3 isn’t more detailed is that ballot amendments in Florida are bound by a single-subject rule, which means they must present voters with only a single issue and not be confusing. Challenging marijuana ballot initiatives on pedantic single-subject grounds has become a go-to tactic for legalization opponents, says Matthew Schweich, executive director of the Marijuana Policy Project, an anti-prohibition group.

“We had a victory overturned in South Dakota in a single-subject lawsuit,” Schweich says. “We also had our Nebraska medical campaign kicked off the ballot, having already qualified, in 2020, due to a single-subject challenge. So we’re very sympathetic to those who are averse to taking risks in an initiative drafting process due to the threat of a single-subject rule, and that certainly applies in Florida.”

In fact, two advocacy groups and Florida Attorney General Ashley Moody challenged Amendment 3 on single-issue and clarity grounds, respectively.

Moody’s office argued it misled voters in several ways: It failed to inform voters of the continuing illegal status of marijuana under federal law, misled voters on state oversight by failing to grant health officials authority over recreational sales, and misled voters into believing there would be more competition in the recreational market. “This carefully curated ballot summary misleads in ways that, though sometimes subtle, are likely to influence voters—and to do so in a way that entrenches the Sponsor’s monopolistic stranglehold on the marijuana market to the detriment of Floridians,” Moody’s office wrote in its brief to the Florida Supreme Court. “The initiative should be stricken.”

Moody successfully blocked two proposed marijuana amendments using similar arguments in 2021. This time, the Florida Supreme Court, stacked with conservative DeSantis appointees, approved it for the ballot anyway.

The arguments against the measure mostly serve to demonstrate how weak the case against it is: If the worst fear opponents of Amendment 3 can conjure is a smelly hotel hallway, that pales in comparison to the injustice of throwing thousands of adults in jail and prison every year for smoking marijuana.

If Amendment 3 passes, it will be a decisive rejection by voters of the sort of quality-of-life arguments that DeSantis and other legalization opponents have turned to.

“That’s the flip side of the coin of the 60 percent rule,” Schweich says. “It sucks and it makes it hard to win and it’s stressful, but you do walk away with a pretty strong mandate from the people.”

‘They’re Arresting People for Smoking Cannabis on the Beach?’

If you thought “Free Florida,” as DeSantis likes to call it, was the sort of place where a cop might turn a blind eye to a little ol’ joint, you’re wrong. But you’re not alone.

Last December, I sat in Miami-Dade County misdemeanor court watching the daily parade of defendants appearing for the usual stuff, like open container violations and boating offenses—this is, after all, Florida—when one case caused the judge to raise his eyebrows.

The defendant had been cited for smoking marijuana on the famous sands of Miami Beach. “They’re arresting people for smoking cannabis on the beach over there?” the judge asked the line prosecutor, seeming to be honestly surprised that this case was appearing on his already-crowded docket.

The state assured the judge that Miami Beach still takes marijuana enforcement quite seriously. And so do many cities across the state.

Data from the Florida Department of Law Enforcement show there have been roughly 3,300 marijuana charges filed in county courts so far in 2024, and nearly 6,500 last year. WWE wrestler Liv Morgan was among those arrested for marijuana possession early in 2024. If a professional wrestler can’t get a break for possessing pot in Florida, what hope is there for the rest of us?

These arrests are what Amendment 3 seeks to end. Smart & Safe Florida, the campaign to pass the amendment, has started hammering on overcriminalization in its appeals to voters. Over July 4 weekend, the campaign dropped two television ads across the state about the injustice of marijuana arrests. It featured John Morgan, managing partner of the massive private injury law firm Morgan & Morgan. Morgan is known as Florida’s “pot daddy,” and his firm spent $15 million on the successful campaign to legalize medical marijuana in the state.

“Nearly 250 years ago, our nation declared our independence,” Morgan said in one of the ads. “Now it’s time for us to declare our independence from laws that demand jail time for simply having or consuming marijuana.”

“Amendment 3 will put a stop to this and let the cops fight real crime, not fake crime,” he says in the second ad. “I’m tired of people being thrown in jail for something that is less harmful than alcohol or opioids.”

‘You Are Not Getting Into the Florida Cannabis Industry’

The reason Smart & Safe Florida is able to blanket the state in TV ads on July 4 weekend is that it has raised $61 million since 2022, making it the most well-funded marijuana legalization campaign in U.S. history.

Most of that eye-popping figure has come from Trulieve, one of the biggest publicly traded marijuana companies in the world by market capitalization. Trulieve operates more than 140 medical marijuana dispensaries throughout Florida, dominating the space. It sold roughly half of all legal flower in the state in 2020, according to MJBizDaily. Trulieve has donated $55 million to Smart & Safe Florida.

Trulieve is the biggest license holder. There are no small ones.

Mom-and-pop operations do not exist in Florida’s medical marijuana market. That’s by design. All MMTCs are required to be vertically integrated, meaning they must be able to cultivate, process, and retail their own product. The state also slow-walked the implementation of medical marijuana and delayed awarding licenses. It has also steadily increased the fee for licenses more than 20 times since voters first approved medical marijuana in 2016, so that a license now costs $1.3 million. There are currently only 25 licensed MMTCs in Florida, and only one of them is minority-owned.

“Basically, unless you have a huge amount of capital access, you are not getting into the Florida cannabis industry,” Fox says. “Even the few carve-outs that the medical program had to help enfranchise marginalized communities and in particular black farmers have been either very, very slow to roll out, have rolled out poorly, or have been challenged through litigation.”

All of this, although explicitly demanded by the state of Florida, has created the unavoidable reality that Amendment 3 will lock in the small number of existing license-holders and lock out everyone else, unless and until the Legislature creates additional regulations or ramps up issuing new medical licenses.

Even the DeSantis administration has keyed in on this line of attack, although it’s little more than concern-trolling.

“Amendment 3 would create a monopoly on recreational,” DeSantis aide Christina Pushaw posted on X in August. “It also doesn’t allow home growing. Why is it that other states that have passed recreational marijuana also allow individuals to home grow, but Florida’s Amendment 3 specifically does NOT? It’s not about ‘freedom,’ it’s corporate greed.” (The Republican-controlled Florida Legislature and governor’s office remain free to pass and sign a bill legalizing home-grown marijuana anytime they wish.)

In fairness to the Amendment 3 drafters, they had to say something about who was going to be able to sell recreational marijuana, but they also had to avoid the scenario where a judge rejects the initiative on single-subject grounds. Grandfathering in existing medical dispensaries was a simple solution.

“They have about as good of a defense for a relatively closed licensing system that any initiative could have,” Schweich says. “And I’ll be somebody who’s going to be advocating for more licenses, more competition, and lower barriers to entry.”

Schweich also notes that there’s no way the Amendment 3 campaign could afford to run competitively in a large state like Florida without industry support.

“Now the cannabis reform movement, the nonprofit side, is very small,” Schweich says. “We could never fund a Florida campaign given the costs. So if there wasn’t an incentive for the existing medical operators, would they have donated to this campaign? And would we really all be better off with another four years of prohibition in Florida?”

Pot Protectionism

Pot legalization advocates pushed for a ballot measure because the chance of the Florida Legislature passing anything close to Amendment 3 was about the same as the chance of a snowstorm in Miami. But if Amendment 3 passes, the state’s Legislature might open up the pot industry to more competition. Fox thinks “that it’s much more realistic that they might be able to push through something that will create a more fair licensure structure.” But if that doesn’t happen, Florida’s legalization regime would be among the more closed and protectionist systems in the country.

Since Colorado became the first state to legalize in 2012, states have enacted a fairly wide spectrum of regulatory schemes. Colorado’s was largely an unfettered market, but that sort of free-for-all bothered both social conservatives and many pro-legalization liberals. The District of Columbia’s legalization efforts have been stuck in limbo because of congressional interference since 2015, resulting in an awkward gray market, but it also allows home cultivation of up to three marijuana plants per adult.

Other states have added “social equity” provisions to their legalization measures. Massachusetts and New York, for example, both have programs to prioritize minority applicants and reinvest in communities that were targeted by the war on drugs.

Equity provisions may be well-intentioned, but in practice they amount to another way for the government to pick winners and losers, with the usual results. The rollout of New York’s legal marijuana market has been disastrously delayed and dogged by accusations of favoritism and retaliation. Entrepreneurs who tried to get in on the ground floor of the industry are on the verge of bankruptcy, while thousands of illegal storefronts are selling gray and black market weed—tests of which have revealed high levels of fungus and pesticides.

Likewise, overregulation and overtaxation in California has kneecapped what was supposed to be the biggest legal marijuana market in the country. Michigan, despite having roughly 20 million fewer people than California, recently overtook California as the largest state marijuana market in terms of grams of cannabis legally sold. California is still bringing in more dollars than Michigan—$5 billion versus $3 billion in 2023—but that is because California heavily taxes cannabis. Crain’s Detroit Business reported that some California consumers can face up to a 38 percent tax on marijuana when all the state and local beak-wetting is added up, whereas Michigan only applies a 10 percent excise tax and 6 percent sales tax, with no local taxes allowed.

The result: Michigan’s legal marijuana is actually competitive with black market prices, whereas high prices are driving a significant share of California’s consumers to the black market.

It may be that, as with democracy in general, voters get the legalization schemes they deserve. But Floridians don’t seem to mind too much. A July Fox News poll found that 66 percent of respondents supported Amendment 3, including 57 percent of Republicans.

‘We Have To Pay $5 Million To Keep Our End of the Veto’

DeSantis has often used his power and his bully pulpit to get his way in Florida, but this time he is facing extremely well-funded opposition from out-of-state companies that he has little leverage over, on an issue that is more popular than him.

Perhaps sensing the disadvantage, he’s been trying to find any way he can to undercut Amendment 3. DeSantis announced the creation earlier this year of the Florida Freedom Fund, a political committee to steer donations toward fighting Florida’s abortion and marijuana ballot amendments in ways that he can’t through his official office. So far, the Florida Freedom Fund is being dwarfed by its opposition. In its first five weeks of fundraising, it raised only $10,000. A Republican billionaire also committed $12 million to his own anti–Amendment 3 political action committee.

But DeSantis has his own industry allies. Earlier this year, he vetoed a Republican-led bill that would have harshly regulated Florida’s hemp industry. He cited the number of jobs and small businesses that the state’s burgeoning hemp industry supported. The Miami Herald, however, has reported that the governor was aiming to enlist the industry as a wedge against Amendment 3.

Ideologically, the veto made little sense, since there is no functional difference between a pot dispensary and a head shop selling intoxicating delta-9 THC derived from hemp—except that the former would be more tightly regulated than the latter if Amendment 3 passed. Intoxicating hemp-derived THC is only legal because Congress didn’t know it was possible to extract psychoactive THC from hemp when it legalized the crop in 2018. But DeSantis wants some heavy-hitters in his corner in the fight against Amendment 3, and the hemp industry, which has close ties to the Florida Republican establishment, is hoping that it can avoid a Big Pot monopoly and maintain a favorable regulatory environment in the state.

In July, CBS Miami reported on a WhatsApp group of Florida hemp industry insiders. The purpose of the chat group, which had more than 1,000 members, was to drive money to the Republican Party of Florida, and it included a bank routing number for donations. “We have to pay $5 million to keep our end of the veto,” one hemp executive wrote to the group.

DeSantis confidently predicted that voters will reject Amendment 3, but it’s a prediction that carries no small amount of political risk.

If he’s wrong on election night, he’ll be on the wrong side of a 60-plus percent landslide, and the only smell on legalization opponents’ minds will be the stink of failure.

The post Big Pot vs. Big Government in Florida appeared first on Reason.com.

Source: https://reason.com/2024/10/19/big-pot-vs-big-government/