Another Medical Marijuana Company Challenges Miami Beach Law Regulating Dispensaries

The City’s attempt to regulate the location of medical marijuana dispensaries has once again landed in court. AltMed,  which currently operates dispensaries in nine Florida cities, has filed suit against Miami Beach claiming the 1,200-feet distance separation requirement between medical marijuana facilities is unconstitutional and was invalidly enacted without proper notice and public comment. This is the second challenge to the law which limits the number of possible dispensary locations within the City and set up a scramble among providers to be the first to get licensed. Two companies say the changes to the law left them holding the bag on leases and build-out costs for in-process facilities that now violate the separation requirement.
 
According to the Court filing, AltMed, relying on the medical cannabis ordinance in place at the time, signed a lease in March 2018 on a space at 607 5th Street and, in November of that year, applied for a building permit. The law then included a 500-feet separation requirement from schools and churches, but there was no such requirement for separation between dispensaries.
 
Despite a subsequent proposal for a distance separation of 300 feet between dispensaries that was discussed by the Planning Board in December and recommended favorably to the City Commission, “the City was accepting building permit applications for medical cannabis dispensaries from the end of 2018 through the beginning of 2019 despite knowing some potential soon to be passed ordinances could affect the fate of such dispensaries,” according to the lawsuit.
 
In January, the Commission passed the ordinance with the 300-feet separation requirement on first reading. The suit claims that in February, on second and final reading, the 1,200-feet separation clause was added after the public hearing, “without any staff analysis or recommendation or other articulated justification, and without entertaining a motion or a proper vote to amend the separation requirements.”
 
“No member of the public or any AltMed representative had an opportunity to analyze the importance of or comment on the 1200 feet space requirement as the amendment was not available for further review before the meeting in which it was passed,” the suit states.
 
After the ordinance passed, AltMed says a surveyor confirmed its 5th Street location “was not within the 1,200-foot limit of another dispensary, or within 500-feet of a church or school.”
 
On April 1, AltMed applied for a Business Tax Receipt (business license) and submitted the required Business, Operation, Security, and Odor Management Plans to operate a medical marijuana facility. But by the end of the month, the suit states, the City had granted a permit for a dispensary to a “rival company” within 1,200 feet of AltMed’s dispensary location despite the City’s awareness of AltMed’s plans through various meetings between the Building Department and AltMed’s contractor during the building permit application process.
 
“AltMed justifiably and in good faith relied on the City’s Building and Zoning Department’s interpretation of the Dispensary Ordinance, its assurances, and representations to its detriment,” AltMed says in the suit. “The City reasonably should have expected that its ordinances, assurances, and representations would induce reliance and had the duty to inform Altmed of a competing business applying for a similar permit than the one Atlmed was applying for.”
 
The “rival company” that squeezed out AltMed is MedMen which filed its own lawsuit against the City after it was caught in a similar situation for its planned location on Alton Road when the distance separation requirements were implemented. MedMen is opening a location at 5th and Collins while its lawsuit regarding the Alton Road location is pending. 
 
AltMed claims the distance separation requirement law is both unconstitutional and unlawful.
 
“The City was required [by Florida law] to re-advertise the proposed ordinance and re-notice the public hearings to provide the opportunity to the public to comment and voice concerns on the change,” according to the suit. “The sudden change from 300 feet to 1,200 feet was a substantial and material change. It quadrupled the minimum distance requirement between medical marijuana treatment dispensing facilities and pharmacies.” Therefore, the suit states, “the new ordinance was invalidly enacted.”
 
In addition, AltMed says, “The Florida Constitution legalizes medical cannabis but does not place restrictions on its sale and distribution. Accordingly, no law can severely restrict its production and sale without the proper scrutiny on the purpose of such severe regulation.”
 
“[T]he 1200 feet distance separation requirement effectively reduces the number of dispensaries to a handful of locations. Thus, the City has done by indirect means what cannot lawfully be done – limited the number of facilities,” according to the lawsuit. One block is about 300 feet so instead of allowing one dispensary for every one block, under a 1,200 feet rule, it could mean one facility every four blocks within the limited areas the dispensaries are allowed.
 
AltMed claims it has suffered irreparable harm as a result, incurring “significant obligations in reliance on the City’s dispensary ordinance” including a long-term lease on the 5th Street property that cannot be terminated without substantial penalty. The company is asking the Court to force the City “to recognize AltMed’s vested rights” to open its dispensary on 5th Street and to stop the City from enforcing the medical marijuana dispensary distance separation requirement. 
 
AltMed is also asking to have its suit consolidated with MedMen’s so that the case “may proceed to trial in a much more efficient and speedy manner thus eliminating the unnecessary cost and delay of hearing the same issue twice” and to prevent the “possibility of inconsistent verdicts on the issue of the validity of a municipal law.”
 
Recently the Court denied the City of Miami Beach’s motion to dismiss the MedMen case and ordered mediation before December.
 
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