State regulators didn’t do anything wrong when they rejected a medical-marijuana company’s request to open dispensaries near or adjacent to convenience stores, an administrative law judge decided on Tuesday.

Green Thumb Industries, which operates RISE dispensaries in Florida, more than two years ago announced a lease agreement with Circle K stores. An October 2022 news release said the company — commonly known as GTI — intended to launch a “test and learn phase” of the plan with 10 dispensaries adjacent to Circle K’s in various parts of Florida beginning in January 2023.

News about the partnership sparked national headlines and caused ripples at the state Department of Health’s Office of Medical Marijuana Use, which regulates pot companies.

GTI in early 2023 sought approval for a dispensary located adjacent to a Circle K in St. Petersburg, but the plan was nixed by Office of Medical Marijuana Use Director Christopher Kimball. Kimball also shot down GTI’s proposals to open dispensaries located near Circle K stores in Ocala and Orlando, saying the plans did not comply with state law for a variety of reasons.

In an October 2024 letter denying GTI’s request to open a dispensary adjacent to a Circle K in Ocala, Kimball pointed to part of a law that prevents medical-marijuana operators from making changes that would result in a “a lower standard” than what was represented in their original license applications. The health department “cannot reasonably determine that co-location of a dispensing facility with a convenience store and gas station will not be a lower standard than what is currently approved,” Kimball wrote to GTI.

Kimball also highlighted a number of “safety and security considerations,” such as “increased risks of crime” associated with convenience stores and gas stations, and a “risk of diversion due to disproportionate crime rates, high traffic and accessibility.”

In addition, Kimball raised concerns about the proposed dispensary’s “association with a convenience store which sells products enticing to minors” and the “high frequency with which adolescents visit convenience stores.”

Lawyers for GTI in November filed a petition at the state Division of Administrative Hearings accusing health officials of unlawfully applying “unadopted rules” in denying the requests.

The “unadopted rules at issue impose unpromulgated regulatory requirements” on GTI and other operators “seeking to expand their business,” Will Hall and Daniel Russell, lawyers at the Dean Mead firm, wrote.

Nothing in Florida law restricts medical-marijuana companies from opening dispensaries near gas stations, the lawyers argued.

“These unadopted rules restrict the growth of these businesses despite the fact that the entities are otherwise in compliance with statutory and properly promulgated regulatory requirements,” GTI’s lawyers argued.

But Administrative Law Judge Joshua Pratt, who held a hearing in the case last month, issued a ruling Tuesday that supported Kimball’s decisions.

“He (Kimball) considered all three of the variance requests on a case-by-case basis. He did not apply a bright line policy to deny any of the three variance requests. He reviewed all three of the variance requests based upon the individual facts and circumstances surrounding the requests,” Pratt, a former lawyer for Gov. Ron DeSantis’ administration, wrote in a final order.

Kimball “also exercised his discretion in determining that the same factors regarding convenience stores and gas stations were relevant” to the three requests “and in determining how to apply and weigh the factors based on the individual facts and circumstances surrounding the requests,” Pratt found.

In an amended petition filed on Nov. 22, lawyers for GTI argued that dispensaries “are currently located adjacent to all sorts of businesses” throughout Florida and that state law does not prohibit them from being adjacent to gas stations or convenience stores.

“Thus, prior to extensive media coverage surrounding one of GTI’s proposed dispensary locations, OMMU (Office of Medical Marijuana Use) approved numerous other dispensaries located next to convenience stores or gas stations. Then, without notice, warning, or explanation, the department shifted its practices in or around January 2023 to implement the non-rule policies at issue, leading to the denial of GTI’s variance request,” the company’s lawyers wrote.

The amended petition included photos of dispensaries run by other medical-marijuana companies that were near gas stations, convenience stores and, in one instance, a miniature golf center. In another example, a Trulieve dispensary in Gainesville is located in the same strip mall as a Wawa convenience store.

National attention on the announcement about planned dispensaries with Circle K stores came after leadership changes at the Office of Medical Marijuana Use.

Former Director Chris Ferguson, who had approved other requests for dispensaries near gas stations or convenience stores, was moved to another position at the health department weeks after the GTI announcement. DeSantis replaced Ferguson in November 2022 with Kimball, an attorney who spent more than two decades in the U.S. Navy and served in the Judge Advocate General’s Corps, as did the governor.

GTI has another case pending at the Division of Administrative Hearings focused on the denial of a proposed dispensary in Ocala, which would be in a building separate from an adjacent Circle K. The petition was filed with the Department of Health in November, and the agency referred it to an administrative law judge on Monday.

The pending petition, in part, questioned state health officials’ position that locating a dispensary adjacent to a convenience store would increase risks of crime.

“It is unclear what the legal basis for any such objection to the Ocala variance, or any other variance seeking to open a new medical marijuana dispensing facility, would be,” GTI’s lawyers wrote.

State law regulating medical-marijuana companies “includes no reference to crime associated with specific locations, neighboring business, etc., or any other consideration relevant to opening a new dispensing facility,” they argued.

“If there were, then this would likely preclude such facilities from being opened in various neighborhoods or next to many types of businesses (such as liquor stores, banks, pawn shops, etc.),” the pending petition said.

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This article appears in Jan 2-8, 2025.