MIAMI _ In Florida, the medical marijuana space is headed to becoming a multibillion-dollar business with more than 277,000 patients and counting. The nascent industry has grown exponentially since it was expanded by a 2016 citizen ballot initiative to legalize pot for medical use.
While flourishing, the industry is still new and experts from Florida and beyond say the state has a bit of catching up to do when it comes to creating a secure business environment.
After two Soviet-born South Florida businessmen indicted on campaign finance charges were found to have pursued entry into Florida's medical marijuana industry, it left an open question for those who work in cannabis: How could this have happened?
Lev Parnas and Igor Fruman _ naturalized U.S. citizens now subpoenaed to turn over documents in the impeachment investigation into President Donald Trump _ sought to invest in one of Florida's state-issued cannabis licenses. Their plan appears to have been unsuccessful due to an inability to prove that they had the cash, but a Miami Herald report raised questions of how a purchase like it could happen.
According to their indictment, Fruman, Parnas, and business partners Andrey Kukushkin and David Correia, worked in Nevada in June 2018 to gain a marijuana license there. Prosecutors say they planned to create a marijuana company, and Correia created a table of planned political contributions worth up to $2 million in a "multi-state license strategy," the indictment says.
The group failed to obtain a license because it applied too late in the state process, according to the indictment. But prosecutors said Parnas, Fruman, Correia and the foreign business partner "continued to meet into the spring of 2019" in discussion of their marijuana business.
Florida licenses are obtained from the state following a long and expensive application and vetting process, after which they can be used to grow, process and sell medical marijuana. Currently, 13 of the 22 licenses operate this way.
Alternatively, the license continues to exist as a piece of paper worth around $50 million to a potential buyer. The license can grow in value and eventually flip for large amounts of cash to a wealthy investor or company publicly traded on the Canadian stock market. In other words, those licenses can be purchased by people who wouldn't have made it through Florida's requirements that applicants have experience cultivating Florida plants or any real experience in agriculture at all. They must, however, pass a background check.
The value and intrigue of licenses in legalized states caught the attention of the FBI, which took the unusual step four months ago of warning about public corruption in the marijuana industry in western states where they said an individual license can be resold for as much as $500,000.
"We see people willing to pay large amounts of money to get into the industry," Supervisory Special Agent Regino Chavez said in a short podcast released in August by the FBI.
