COVER STORY

MUSCLED OUT OF THE MARIJUANA BIZ

Was the wrong Gainesville nursery given the only license to grow Charlotte’s Web in Northeast Florida?

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Gainesville nurseryman Alan Shapiro just wants to grow some pot.

Low-THC marijuana, meant for medical purposes, that is. 

But his company, San Felasco Nurseries Inc., may be shut out of the business, despite receiving the highest score in Northeast Florida from the Florida Department of Health (FDOH).

A three-person FDOH panel was convened to grade nurseries around the state and award five nurseries — one in each region — licenses to grow the so-called Charlotte’s Web. San Felasco, also known as Grandiflora, received the highest score out of any in this region, and Shapiro thought his nursery would be awarded one of the licenses. San Felasco, however, received a letter from the FDOH, claiming it had been disqualified because an employee had failed his level-two background check.

Shapiro disputes that claim in his petition, filed in December saying there was a “discrepancy” in the background check in question, and that the FDOH had not given him an opportunity to correct the discrepancy.

“The DOH’s disqualification decision was incorrect, and also violated the DOH’s own rules and procedures. This is a new process for the DOH, so it is understandable that mistakes can be made, but San Felasco Nurseries is hopeful the DOH will rectify the situation quickly so the patients of Florida can finally have access to the medicine they need,” wrote Jim McKee, an attorney for San Felasco, in an email through a public relations firm recently hired in the wake of increased media attention.

Shapiro is one of 11 nursery owners to submit petitions in dispute of the department’s choices across all five regions of the state, further delaying the production and distribution of the drug to the state’s epilepsy and advanced cancer patients. The program is already more than a year behind schedule.

When contacted by Folio Weekly Magazine, Shapiro declined to comment directly for this story, and declined requests to have our photographer visit his nursery.

Daniel Banks — the San Felasco employee whose background check FDOH determined disqualified the nursery’s application — was slated to become the Research & Development Director for San Felasco if the nursery had received the license. He now lives in Colorado.

Banks also submitted a petition, which echoes the argument in San Felasco’s petition, that his offense was not a disqualifying one, and even if it were, Banks’ record has been expunged, and can’t be used against him.

The offense: A 2004 misdemeanor charge for possession of a depressant, stimulants, hallucinogenics or steroids, which, according to the petition, is not a severe-enough offense for disqualification, according to Florida statute.

According to FDOH rules, each nursery applicant was required to provide a level-2 background check, which checks a person’s arrest and criminal record with the Florida Department of Law Enforcement, for all its owners and managers. Until that and other requirements were met, no nursery was to be scored, according to the rules.

San Felasco, however, was scored, and received the highest mark in the region, 3.975, beating second-place Chestnut Hill by nearly two-tenths of a point. The scores were calculated by averaging the scores of three judges, on a five-point scale, in five categories: cultivation, processing, dispensing, financials and a medical director’s qualifications. The cultivation and processing categories carried the most weight.

Receiving a score, Shapiro argued in his petition, implies that the department “had concluded that all owners and managers
for San Felasco had passed level-2 background screening, as San Felasco would not have been permitted under the office’s rules to advance to the scoring phase absent such a determination.”

But instead of receiving a congratulatory letter from the FDOH on Nov. 23, San Felasco’s owner received notice that the nursery hadn’t corrected the deficiencies in its application regarding a failed background check, as requested, and therefore was disqualified.

In the petition, Shapiro claims San Felasco provided the department with requested information regarding the employee’s background check on Sept. 4, and followed up Sept. 15 and 24, to ensure everything had been resolved, and had received no response until the Nov. 23 letter.

The department awarded the Northeast Florida contract to Chestnut Hill Nursery (also called Chestnut Hill Tree Farm or Chestnut Hill Outdoors).

San Felasco isn’t the only nursery taking issue with the department’s decisions, as Loop’s Nursery & Greenhouses of Jacksonville also each filed a petition.

Chestnut Hill’s owner, Robert Wallace, served on the FDOH rulemaking committee formed early in 2015, which was tasked with creating the criteria nurseries needed to meet to receive a license. Also on that 12-person committee was Jill Lamoureux of CannLabs Inc., who was also listed as an advisor to Chestnut Hill in its application.

Wallace is one of four nursery owners on that rulemaking committee whose nurseries were awarded licenses by the department.

Loop’s received the third-highest score in the region, .4 behind San Felasco and .2 behind Chestnut Hill. 

The other two regional nurseries that applied for a license to grow medicinal marijuana, Hart’s Plant Nursery of Jacksonville and Bill’s Nursery of Homestead, received significantly lower scores and did not file petitions.

In its petition, Loop’s applauds the department’s decision to disqualify San Felasco for the failed background check, and calls Chestnut Hill’s legitimacy into question. Loop’s claims that Chestnut Hill has not been a continuously operating nursery for 30 years, one of two preliminary requirements for each application to be considered. The other criterion was that each nursery have at least 400,000 plants growing on its property at the time it applied.

Numerous attempts by FWM to reach owner David Loop and the attorneys listed on Loop’s petition directly for a period of at least two weeks have been unacknowledged.

Shapiro argued the same point in his petition, claiming that Chestnut Hill has done business under a variety of names since the 1980s, but cannot claim to meet the 30-year continuity requirement.

In its application, Chestnut Hill provided a document from the Department of Agriculture & Consumer Services that listed its initial registration date in November 1981, and a casually toned email from that department confirming that Chestnut Hill met the minimum requirements for the compassionate cannabis permits.

Shapiro further claimed Chestnut Hill changed names and let its nursery registration lapse in 1999 before being re-registered later under a different name.

“The Office’s decision to accept applications from ... vendors who fail to meet the statutory minimum requirements of [state statute] while simultaneously disqualifying San Felasco for a purported failure to meet the minimum requirements of the statute, reflects an arbitrary and capricious process and result,” Loop’s petition says.

Loop’s petition claimed that Chestnut Hill’s application contained “an intentional material misrepresentation of fact regarding its ability to offer qualified patients the Charlotte’s Web strain of low-THC cannabis.”

Loop claims that Chestnut Hill does not have the ability to grow and distribute the drug, but did not specify why.

Robert Wallace of Chestnut Hill declined to comment for the story, under the advice of his attorney.

Loop’s was the only applicant with direct ties to Stanley Brothers, six brothers from Colorado who developed Charlotte’s Web by crossing a low-THC strain of marijuana, also known as “Hippie’s Disappointment,” with industrial-grade hemp.

Loop’s claims to have worked with Stanley Brothers to develop standard operating procedures and “good agricultural practices specific to low-THC cannabis” in its petition. Loop claims his nursery is the only one licensed in Florida to legally cultivate and process the strain of low-THC cannabis known as Charlotte’s Web.

On Nov. 23, Loop’s Nursery received a letter from DOH informing it that Chestnut Hill would be awarded the license to grow and distribute in Northeast Florida.

 

•          •          •

 

WHAT’S THIS ALL ABOUT?

The fight by advocates of medicinal marijuana — who hope legal low-THC medical marijuana in Florida can help treat the estimated 125,000 people who suffer from severe epilepsy and advanced cancers — ended when Governor Rick Scott signed the Compassionate Medicinal Cannabis Act of 2014 into law. They certainly didn’t expect implementation of the law to take so long.

When the law was signed, the plan was to have doctors prescribing the drug to qualifying patients on Jan. 1, 2015. But the first of many setbacks came that fall, when the FDOH’s first plan to select nurseries to grow and dispense the drug — through a lottery — was ruled “arbitrary and invalid” by a judge.

Then, the department spent months putting together a rulemaking committee, held several hearings to determine who would judge each nursery and how, and even had to replace the director of the overseeing office, the Office of Compassionate Use, midway through the process.

The deadline was moved several times, and now, more than a year after the drug was supposed to become available, the department is still trying to decide what to do with 11 petitions and five nurseries left in limbo before it can continue setting up its infrastructure.

FWM sent numerous emails to several FDOH offices, but received no response. However, the Florida Department of Health has provided the same canned statement to news organizations across the state on this issue when asked when or how it might be resolved.

“We remain committed to getting this product to children with intractable epilepsy and people with advanced cancer as safely and quickly as possible,” an FDOH spokesperson said in an October story in the Tallahassee Democrat.

The stakes are high for what analysts have predicted to be a $780 million industry, and advocates are pushing hard for full-fledged medical marijuana to be legal next year, which could benefit even more potential customers.

For now, the nurseries that could grow and distribute it, and those who suffer from pain, must still wait for answers.

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