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By Hunter Dublin | June 23, 2022
The Sunshine State has an issue with marijuana transparency. According to the lawsuit, a cannabis investor and medical marijuana patient advocates are suing the state. This is after regulators reportedly refused to give public data and accepted a cannabis investment firm's desire to possess more licenses than permitted by state law.
The action is the latest chapter in the legal tale of cannabis investment firm Gotham Green Partners' attempt to seize control of multistate marijuana company iAnthus from investors such as Michael Weisser, a plaintiff in the complaint.
After iAnthus defaulted on a loan, the Ontario Superior Court of Justice approved a proposed recapitalization deal for Gotham Green to assume ownership of the company in 2020. The initiative requires regulatory permission from US states, many of which have cross-ownership limitations to combat industry monopolies.
Florida's medical marijuana rules ban an individual or corporation from "directly or indirectly" owning more than 5% of more than one medical marijuana licensee.
"It's astounding that this is such a flagrant breach of the regulations," Weisser said in an interview. "[The regulators] simply want to push everything under the rug." Weisser has been appealing a decision by Florida's Office of Medical Marijuana Use (OMMU) to grant Gotham Green a variance that would enable it to own more than 5% of two state-licensed medical marijuana firms, MedMen and iAnthus.
According to the case filed in the state's 2nd Judicial Circuit Court on Friday, the Requested Variance "would illegally enable an ownership structure that violates [state law]."
Weisser has also attempted to get papers about the deviation through public records requests. He claims that the regulator has not provided the essential records but has provided a censored report from a third-party consulting business.
Carr, Riggs, and Ingram's redacted draft report, dated June 29, 2021, concluded that the "proposed recapitalization structure for iAnthus does not appear to fulfill the requirements of Florida Statute.”
It's unclear why OMMU allowed the variance later or if a similar conclusion was included in the firm's final accounting report to the agency.
"The Department does not comment on any current case," according to a spokesman. In an interview, plaintiffs' attorney Stephen Menton stated that it is extremely rare for a governmental body to proactively redact such material for public information requests.
He explained that a corporation must file a court order to validate a trade secret claim. According to Menton, the authorities "concluded that particular material constituted trade secret" in this case.
Some of the other papers produced by the government in response to the records requests were several pages long and "totally censored," according to Menton. "We have no idea what [the paper] is." Plaintiffs are attempting to compel the agency to release all (unredacted) materials sought via public records requests.
They also want the court to overturn the department's decision to issue the deviation and declare that the permission exceeded the department's regulatory power. As marijuana legalization spreads across the country, policymakers and patients alike are concerned that giant cannabis firms are monopolizing the sector.
Menton described Florida's regulatory system as "quite restrictive... to begin with." Plaintiffs in the complaint, patient advocates, are worried about "an endeavor to consolidate and limit the number of chances that patients have to get [various sorts of] goods." It isn't just Florida.
iAnthus reported a week ago that Massachusetts authorities had authorized a change in ownership as part of the Recapitalization Transaction. "We believe they are a blatant violation of Massachusetts rules as well," Weisser added.
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