Dispensary owner alleges unfair trade practices
The CEO of the only licensed medical marijuana dispensary in Hot Springs’ city limits filed a lawsuit Wednesday alleging unfair trade practices he said have cost his business $5 million.
Dragan Vicentic said Thursday
that three cultivators licensed by the Medical Marijuana Commission have refused to sell to Green Springs Medical after he told the commission in June that growers couldn’t keep up with demand. He urged commissioners to issue the remaining cultivation licenses allowed by the state constitutional amendment that legalized marijuana for medicinal purposes, provoking reprisals from the growers, he said.
“We only had three cultivators producing, and there were over 65,000 patients at the time,” Vicentic said in an email. “They could not keep up with demand. There was an immediate need for the other three cultivators to be licensed to keep the medical marijuana program moving harmoniously.
“After the three other cultivators were approved, I was blackballed by Bold Team,
Osage Creek and later Delta Medical from being able to receive any product. After months and months of pleading with them to furnish product for demanding patients, I was left with no other alternative other than to file suit to make them do the right thing and leave their feelings behind.”
He’s suing for damages and has asked the Garland County Circuit Court to enjoin the growers from boycotting Green Springs. The complaint also asked the court to direct the commission to promulgate rules
prohibiting growers from refusing to sell to dispensaries, a practice the filing said violates federal antitrust laws.
“That the defendants have argued that their refusal to sell to the plaintiff is a business issue between the companies,” the complaint said. “In reality, the growing and dispensing of medical marijuana is not attune to an open free market in light of the fact that there are only a limited number of cultivators who can supply a limited number of dispensaries.
“Therefore, this is not a business issue between those in a free market but is an issue between those involved in a very limited market which regulates cultivation and dispensing of medical marijuana.”
Green Springs was the leading dispensary in average daily sales for more than a year after it opened in May 2019, but its market share began to slip last summer. It’s finished 12th out of more than 30 dispensaries in pounds sold in the state revenue agency’s last four sales reports. The ReLeaf Center in Bentonville recently overtook it for the overall sales lead.
According to the complaint, growers sell a pound of marijuana for $2,800 to $3,200. The average retail price is $6,300.
The lawsuit filed Wednesday is the latest litigation involving Green Springs. Bruce Simpson, Vicentic’s business partner in the dispensary, sued him in September 2019, alleging Vicentic forced him out of the business shortly after it became one of the first locations to sell marijuana legally in Arkansas that May. The complaint said Vicentic excluded Simpson from profits, business decisions and denied him access to business records.
Vicentic stipulated in court filings that the parting was mutual.
Special Judge Ted Capeheart ruled in November 2019 that Simpson, listed as the security manager/vice chairman in the application filed with Medical Marijuana Commission, has an equal stake in the business. He ordered Vicentic to set aside half of the profits while Simpson’s lawsuit proceeds. The money would be awarded to Simpson if the court rules in his favor.
The order granted Simpson an equal say in business operations but barred him from the dispensary, a prohibition Capeheart said during an October 2019 hearing was necessary to prevent the litigants from getting into a “fistfight.”
In July of last year, Capeheart ruled Vicentic violated the November 2019 order by failing to notify Simpson about an increase in the business’ rent and every purchase over $1,000.