Florida could rake in big bucks in sales and in tax revenue if Amendment 2 passes in November and medical marijuana becomes legal.
State projections of sales range from $138 million to $5.6 billion. State projections of tax revenue range from $8.3 million to $338 million.
The numbers are based on the number of medical marijuana patients, the amount of pot they may use and the price per ounce.
The state Department of Health estimates there will be 417,000 patients. In addition, the department estimates 250,351 personal caregivers will be needed as well as 1,789 "treatment centers," or dispensaries.
Meanwhile, the estimated cost of carrying out the amendment is just a fraction of possible revenue: About $1.1 million for each of the first two years.
Robert Calkin, founder of the Cannabis Career Institute, believes some of the numbers are conservative but said it's understandable the state would start out that way.
Calkin, a medical marijuana expert from California, holds seminars across Florida and in other states on how to start a medical marijuana business. Florida will have to deal with unanticipated costs, he said. Bureaucracies have been created to regulate the medical pot programs in some other states, without proper training provided to carry them out.
The National Cannabis Industry Association has its own projections of what the Florida market could look like, including the possibility the state could be the second-largest legal market in the country.
The industry projects about 260,000 patients, based on its own criteria, said Taylor West, deputy director. That's 62 percent of the state's projection. "All of this stuff is hard to predict," West said. "It vastly depends on what regulatory scheme they put in place."
Because there is no state data to make estimates, the research office had to look at data from some of the other states that have legalized medical marijuana, said Amy Baker, coordinator of the state Office of Economic and Demographic Research. The office prepared the amendment financial analysis.
The figures were in a report sent to state Attorney General Pam Bondi on Nov. 4, exactly one year before Election Day. There have been no new numbers since, Baker said.
The 16-page report shows the difficulty of trying to gauge medical pot's potential economic impact with no in-state numbers and before the amendment vote is taken. The financial estimate was required by law within 45 days after receipt of the ballot petition, and also was sent to the state Supreme Court.
The amendment's effective date would be Jan. 1. The health department would have six months from that date to come up with rules; nine months to issue ID cards to qualified patients, and caregivers; and nine months to register medical marijuana dispensaries.
So far, 23 states and the District of Columbia have some form of legal medical marijuana program.
In Florida, the state research office started with six approaches and narrowed them down to arrive at a figure of "less than 450,000" potential users in Florida. They looked at data from states with medical pot laws; prevalence of diseases covered by the law; the number of patients expected to be newly diagnosed with a particular disease; use by cancer patients, grown mathematically to represent patients with other conditions; deaths by disease; and self-reported marijuana use.
The health department used data for Colorado and Oregon to arrive at the 417,000 patient estimate, the number of caregivers and dispensaries.
One local entrepreneur said the numbers for patients, dispensaries and money to carry out Amendment 2 are off-base. "I'm going to say the numbers are all low, and I think the people in Tallahassee have no clue," said Mike Ginocchi of Lehigh Acres. Ginocchi said he has been researching the medical pot industry and investing in pot stocks for three years. He's started his own business, MjMoneyMan.com.
Ginocchi doesn't plan to grow or sell marijuana or operate a dispensary. He plans to connect investors with people who need money to get a medical pot business going, he said. "I'm kind of the go-between."
West emphasized the industry association's revenue projections are "rough, back-of-the-envelope estimates."
Florida, regulated in a similar way to Colorado, could do about $780 million in sales in a year," she said. "That's based on what we've seen in other states and adjusted for Florida's population. That would likely make it the second-largest legal market in the country, after California."
To arrive at the estimate, the association took the Florida population and multiplied it by the average percentage of patients in the population of six states with robust medical marijuana programs, including California and Colorado, she said. "That gives us about 260,000 projected patients for Florida."
Then the number of patients was multiplied by amount spent per patient for Colorado in 2013 (about $3,000) to arrive at the $780 million. That number can be multiplied by 6 percent sales tax to make $46.8 million in sales tax revenue. That's on the lower end of the state's projected range.
Florida's estimates for sales tax revenue comes from the comparison of other states' stats, including price data from Vermont and allowable usage from Connecticut, the report says. It also includes data from two of the methods previously mentioned, the survey of self-reported users and use by cancer patients, extrapolated to cover other diseases.
The numbers assume no sales tax exemptions will apply. At the time the report was prepared, it wasn't known to what extent medical pot would be exempt from taxation. However, after State Bill 1030, (also known as the Charlotte's Web bill) passed the Legislature, authorizing low-THC pot for some specific medical uses, state agencies have clarified that medical pot is "largely going to be taxable," Baker said.
No existing exemptions will be applied on a wide scale, so the report numbers are considered an appropriate range, she said.
Would the state set the price of medical pot or would the free market decide? "We don't know at this point of any activity to set prices," said Phil Williams, an analyst for the state research office who helped prepare the report.
"But the Department of Health has pretty broad authority under the amendment, so we don't want to preclude the possibility that they (or the Legislature) may do something at a later date."
Charlotte's Web bill estimated revenue
The state has more recent numbers for projected sales and tax revenues to come from Bill 1030, also known as the Charlotte's Web bill. The sales revenue is potentially $120 million to $790 million. The range in sales tax is $7.2 million to $47.4 million. The bill became law June 16. It says some low-THC strains of marijuana (including Charlotte's Web) may be used to treat some medical conditions, like severe seizures in children. The analysis was done May 29. Sales would start Jan. 1. None of the patients who take low-THC marijuana would be excluded from the numbers estimated for Amendment 2, but the specificity of the law and the more restrictive regulations would make it a separate entity.
National and state market sales revenue
- National (medical and adult-use) in 2013: $1.53 billion
- Projected national market in 2014: $2.57 billion
Top five states in 2013
- California: $980 million
- Colorado (prior to the beginning of adult-use sales): $260 million
- Washington : $60 million
- Michigan: $60 million
- Oregon: $30 million
Source: Arcview Market Research; information provided by National Cannabis Industry Association