Losing PA medical marijuana applicant takes to court to block winning bidder

BrightStar BioMedics, a Scranton-based medical marijuana grower/processor, today filed an injunction request to block the development of a medical marijuana grower/processor by Pennsylvania
Medical Solutions (PMS), a subsidiary of Vireo Health, LLC.

PMS was awarded one of the two Medical Marijuana Region 2, Northeast licenses despite failing to disclose a criminal investigation into its parent company and affiliates as well as having its Maryland licenses suspended at the time of application (and later revoked) for failing to cooperate with regulators and posing a high risk of diversion of the highly regulated substance, according to a statement from BrightStar.

BrightStar scored 3.42 points behind PMS in the Pennsylvania Department of Health’s medical marijuana applicant scoring and says it should be awarded a license if PMS were disqualified.

As we reported in July, PA officials say no replacement permits would be awarded if any winning applicant lost its license for failure to open in time or otherwise be non-compliant with state requirements.

In the filing, Mark Sheppard, of Montgomery McCracken, Walker & Rhoads, LLP, wrote, “BrightStar seeks an order declaring that PMS – a company whose parent, controlling persons, and foreign
affiliates have been implicated in the criminal diversion of cannabis oil – should be statutorily barred from receiving a grower/processor permit and, further that BrightStar – as the entity which finished
immediately behind PMS in the scoring for its region – be awarded the permit.

In February Vireo Health had two executives charged with illegally transporting medical cannabis oil from Minnesota to New York. Vireo has said that nobody involved with the conduct in Minnesota and New York was involved in the PA application.

“It is unfortunate, but not entirely unexpected, when a Company turns to the Courts after failing to win a medical cannabis license in a merit-based process,” a Vireo spokesman told Elevated Nation on Friday.

“Pennsylvania Medical Solutions is proud to have been awarded a grower / processor license through a highly-competitive process in which the Pennsylvania Department of Health evaluated more than 175 applicants. We found the process to be thorough, fair and rooted in a commitment to protect and serve the patients of Pennsylvania. We participated in the process fully and transparently, just as we have in other states such as Minnesota and New York, where our licenses were recently renewed. We will not let matters like these distract us from our mission of providing medical cannabis products to patients suffering from life-threatening and debilitating conditions,” the Vireo rep said.

A BrightStar statement says the company filed this injunction request because the administrative process adopted by Pennsylvania’s  Office of Medical Marijuana (OMM) is insufficient to provide an adequate opportunity to challenge the PMS award. “From its outset, the process the OMM has adopted has been shrouded in secrecy, including, until last week, the names of the government employees who reviewed and scored the applications when the Office of Open Records ordered the names be disclosed.

It is indisputable that had the OMM released the names of the grower/processor licenses prior to the license award, Vireo’s widespread legal problems would have been disclosed to the public through the media,” BrightStar said in a press release.

BrightStar goes on to say that as the OMM requires a six-month timetable for development that it ensures that PMS would be operational before BrightStar or any competitors could fully pursue a challenge.

“Permitting a company to grow and process medical marijuana in Pennsylvania, the leadership of which has demonstrated that it needed, and was willing, to criminally divert medical marijuana oil in order to meet production deadlines in other jurisdictions, will irreparably harm the Commonwealth and its citizens.”

A spokeswoman for the Office of Medical Marijuana and PA Department of Health did not directly address the injunction request filing when contacted by Elevated Nation. “We are moving forward with a patient- focused medical marijuana program to get Pennsylvanians with serious medical conditions the help they desperately need,” was all April Hutcheson said in response to our inquiry about the court matter.

 

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