Florida Pot Growers May Soon Get Rich

Jake Bergmann, Surterra Holdings CEO, is a soft-spoken entrepreneur with stylishly gelled brown hair and a neatly trimmed beard. A private equity manager who also owns a firm called Valkyrie Capital, he's one of a handful of people set to make a windfall in the burgeoning medical marijuana market. His firm's facility near the state capital is built to crank out 3,000 plants per grow cycle. Surterra has already opened two dispensaries, one in Tampa and another in Tallahassee. Plans call for six more by the end of the year.
According to a private equity firm’s prediction, Surterra could generate $138 million in sales by 2021.
Surterra is one of seven firms the state has chosen so far to manage the new medical marijuana business following last year's 71% vote in favor of a constitutional amendment that made it legal. At first, marijuana defenders hoped state lawmakers would establish a free marketplace where as many as a half-million patients could choose from dozens of providers.
Instead, Florida's nascent medical marijuana industry (which could be worth $1 billion by 2020) remains in the hands of seven firms. All of them, like Surterra, had to partner with Florida-based nurseries that have been in business for at least 30 years.
To be steps ahead on possible new competitors, all 7 firms have spent a combined $1.5 million on lobbyists and $667,000 in campaign contributions to Florida legislators in the last election cycle and in the 2018 matchups so far, according to a New Times review of state data. Critics — such as state Sen. Jeff Brandes — have dubbed these companies and their executives Florida's medical marijuana "cartel." During the legislative session this past spring, the St. Petersburg Republican proposed scrapping the state's current program and replacing it with one like Colorado's, which allows more than 500 operators to grow and sell cannabis for medicinal purposes. However, that bill never got out of committee.
During a special session in June, Florida lawmakers caved a little by increasing the number of marijuana-growing licenses. In August, the health department allowed two new cannabis ventures to start their operations. By early October, another eight pot companies got their licenses to grow and sell medicinal weed in Florida.
But Brandes and other detractors claim the system has been set up to favor the seven companies that first secured licenses. According to the senator, Florida is not focusing on what is best for patients, as per the laws, inhibit access and the limit competition resulting in higher prices.
Jodi James, executive director of the Florida Cannabis Network, agrees. Current rules prevent operators from ever setting up shop. James states that the organizations that have licenses spent lot of money lobbying lawmakers, and what we saw come out of the legislative and special sessions had their fingerprints all over it.
So far, the state has authorized ingestion of medical marijuana only through vaporizers and tinctures. Smokable buds are not allowed. And providers are limited to a maximum of 25 dispensaries.