Ownership of 2 Ohio pot chains challenged

The Ohio Board of Pharmacy has accused two medical-marijuana dispensary companies of fabricating or exaggerating information about their ownership.

Harvest of Ohio is not a minority-owned company, as it claimed in its application, the board says. And Greenleaf Apothecaries — whose dispensaries operate under the name The Botanist — is suspected of surreptitiously selling its dispensaries to New York City-based cannabis company Acreage Holdings.

Ohio law bars medicalmarijuana companies from selling their operations until they have been open for at least a year. Ohio’s first dispensary opened in January.

The accusations stem from a wide-ranging state investigation into dispensary ownership, court documents

said. That inquiry is intended to ensure that dispensaries live up to the pledges in their applications, a pharmacy board spokesman said.

Harvest and Greenleaf, both of which have denied wrongdoing, will have the chance to defend themselves before the board. They stand to lose their licenses if the board rules against them.

The exact nature of the pharmacy board’s allegations is unclear because both Harvest and Greenleaf have filed for restraining orders to keep the state from releasing information about their cases. Harvest filed for its order on June 10, and Greenleaf did so on Monday. A board spokesman said the agency can’t comment or release any documents in the two cases until a judge rules on the restraining orders.

Greenleaf owns five dispensaries. Two — in Canton and Wickliffe, a suburb of Cleveland — are open, and three — in Akron, Cleveland and Columbus — have provisional licenses.

Harvest was awarded provisional licenses in Columbus, Athens, and Beavercreek. Harvest majority owner Ariana Kirkpatrick said Tuesday that its dispensaries are ready to open once the state approves them.

Ohio’s 2016 medical marijuana law required the pharmacy board to set aside 15 percent of its dispensary licenses for members of economically disadvantaged groups, which include minorities. Harvest’s application lists Kirkpatrick, who is black, as a 51 percent owner. A judge struck down the state’s carve-out last year, but minority-owned companies still get special consideration in the application process.

The pharmacy board determined in June that Harvest’s ownership does not meet the criteria for minority ownership, and it issued notices for a disciplinary hearing to give the company an opportunity to explain itself.

Harvest said in court filings that the business was formed “in such a way so as to specifically create a minority-owned business that would entitle them to a license award as an ‘Economically Disadvantaged Group.’” Releasing information about the company’s unique ownership structure would reveal information of “high economic value” to competitors, the company said in its request for a

restraining order.

Kirkpatrick said in a statement that the pharmacy board had mischaracterized the company’s ownership. She called the issue a misunderstanding and said Harvest is working amicably with the board to clear up any misconceptions.

“We are committed to operating transparently in every state in which we operate, and we’re working closely with regulators in Ohio to ensure they better understand our structure,” the statement said.

Greenleaf entered into a “management services arrangement” with Acreage in April, according to regulatory filings. Acreage also has extended a line of credit to Greenleaf, court documents said.

The companies struck their agreement after Greenleaf applied for dispensary licenses, an attorney representing the company said in a statement. The filing says that Greenleaf will not seek an ownership change without first acquiring the pharmacy board’s approval.

Any assertion that Greenleaf fabricated information on its application or misled state regulators is “meritless,” Cleveland attorney Tom Haren, who represents Greenleaf, said in a statement. “To be clear, Greenleaf continues to own and operate its dispensaries.”

Board of Pharmacy communication director Cameron Mcnamee said companies in other states had applied for provisional dispensary licenses in those states and then immediately sold them. Ohio wants to prevent that from happening here, he said.