TALLAHASSEE, Fla. – Siding with an orchid grower that wants to get into the medical-marijuana business, an administrative law judge Monday rejected a proposed state rule that was designed to help award up to two potentially lucrative marijuana licenses.

Judge R. Bruce McKibben, in a 25-page final order, said the proposed Florida Department of Health rule did not properly carry out part of a 2017 state law that gives preference to the citrus industry for as many as two marijuana licenses. McKibben backed Louis Del Favero Orchids, Inc., which bought a citrus-processing facility in Safety Harbor and plans to convert it to a marijuana-processing facility if awarded a pot license.

McKibben’s order was one in a series of setbacks for the Department of Health’s Office of Medical Marijuana Use, which has faced an avalanche of litigation related to awarding medical-marijuana licenses. Florida is expected to become one of the nation’s most-lucrative markets after voters in 2016 passed a constitutional amendment that broadly legalized medical marijuana.

Monday’s order was an outgrowth of a 2017 law that the Legislature approved to implement the constitutional amendment. The law focused heavily on creating a framework for awarding a limited number of licenses to businesses that would grow, process and sell marijuana.

One part of the law directed the Department of Health to give preference for up to two licenses to applicants that “own one or more facilities that are, or were, used for the canning, concentrating, or otherwise processing of citrus fruit or citrus molasses and will use or convert the facility or facilities for the processing of marijuana.”

As is common, the Department of Health proposed a detailed rule for carrying out that part of the law. Louis Del Favero Orchids, however, challenged the department’s proposed rule, in part because the measure referred to “property” that had been used for processing citrus.

The department’s use of the word “property” instead of “facilities” would expand the citrus preference to “a broader group of applicants than the statute permits,” attorneys for the orchid grower argued.

McKibben agreed with the grower’s arguments, finding that the department’s proposed rule was an “invalid exercise of delegated legislative authority.”

“In this instance, the department interprets the statutory language concerning ‘facility or facilities’ to include ‘property.’ ” McKibben wrote. “It is impossible to reconcile that interpretation, especially in light of the fact the Legislature contemplated conversion of the facilities. The department’s interpretation is hereby rejected as being outside the range of permissible interpretations. … The preference statute specifically provided a (preference) for using or converting citrus facilities, not properties. The proposed rule does not implement that specific provision of the law.”

During a hearing last month, the Department of Health contended that the law did not require a “facility” to be a structure.

“There are three requirements. You have to own it. You have to prove it is or was used for canning, concentrating or otherwise processing. And you have to demonstrate how you will use that,” Courtney Coppola, who at the time was deputy director of the state Office of Medical Marijuana Use and now is its interim director, said during the hearing.

But Seann Frazier, an attorney for Louis Del Favero Orchids, asked if that meant that a tent, erected where a structure previously was used to process citrus, would make an applicant eligible for the citrus preference.

“You’re saying the facility is the tent. It could also be the space it’s in. So how they will convert that space. They could put a building on it,” Coppola said.

“The facility could be dirt. Unimproved dirt, that somebody could promise to put a $1 million processing plant on top of it, they would still meet the citrus preference. Is that true?” Frazier asked.

Coppola agreed.

News Service senior writer Dara Kam contributed to this report.