Despite a vow of transparency, Maine state regulators now want to keep parts of the new recreational marijuana market a secret, putting the privacy and safety concerns of the industry ahead of the public’s right to know.
A new bill drafted by the Office of Marijuana Policy, L.D. 2091, would exempt trade secrets, security and operating procedures that marijuana businesses provide to the state from Maine’s public records law.
The state contends these exemptions protect a company’s hard-earned knowledge, like a marijuana edible recipe, from would-be imitators, prevent security measures from falling into the wrong hands and avoid an array of industry lawsuits.
This approach wasn’t an easy one for the Office of Marijuana Policy, regulators say. “Strive to be transparent” is one of its guiding principles. So it drafted this bill as a catalyst for discussion, deciding to let state lawmakers make the call.
“The state Legislature will have to consider whether the benefits of an exemption outweigh the inability for public review,” said spokesman David Heidrich. “In the view of the Office of Marijuana Policy, our proposal meets this high threshold.”
Some of Maine’s biggest cannabis companies want to expand the department bill to exempt financial information, too, like who is bankrolling them or what out-of-state interests are managing their day-to-day operations.
Lobbyists who support a public records exemption argue it will prevent a tidal wave of public records requests from marijuana businesses digging up dirt on their rivals, a wave that could delay a spring roll-out of a market four years in the making.
“Unfortunately, with Maine’s marijuana programs we’ve seen the FOAA used as a weapon between competitors,” said lawyer Matt Warner of Preti Flaherty. “This is an unintended consequence of an important basic public right.”
Narrow exemptions like the ones Warner’s client, Wellness Connection, is seeking would not infringe on the public’s understanding of who is financing the industry or what it is doing to prevent diversion, Warner argues.
As of Friday, the Office of Marijuana Policy has received only seven public records requests for marijuana business license information: two from the news media and five from what a department spokesman called “interested parties.”
The office is still reviewing these requests, including one filed by the Portland Press Herald/Maine Sunday Telegram last month, and has yet to act on any of them. So far, the office has received about 90 completed marijuana business license applications.
The Maine Press Association, which represents all of Maine’s daily newspapers, 38 weekly newspapers and two online publications, is opposing the departmental bill, which will be heard Monday before the Legislature’s Veterans and Legal Affairs Committee.
Public interest in how this new industry will operate is intense, even among those who voted yes on 2016’s legalization referendum, said J.W. Oliver, the association president and editor of The Lincoln County News.
“It’s paradoxical, almost nonsensical, that Maine would take a brand new industry about which there are legitimate public health and safety concerns and make their information more secret than a grocery store, a daycare or a gift shop,” Oliver said.
He pointed to Damariscotta, the only town in Lincoln County to opt in to the adult-use market so far, as a case study. Without total transparency, there will be greater public distrust of a new market that still needs to prove itself, Oliver said.
Residents of Damariscotta and the surrounding area want to know what marijuana companies will be doing to prevent robberies in this cash-heavy business, employee theft and retail sales to underage, impaired or addicted customers, he said.
“If they want to be accepted, they need to be open about what they will be doing to protect the community, to be a part of it,” Oliver said. “It is just too much to ask us to trust them, or even to trust the state.”
Some people within the industry itself agree with Oliver, at least to a point. The Maine Craft Cannabis Association thinks detailed security plans and trade secrets should be private, but not the identities of business owners or investors.
Attorney Alysia Melnick said association members fear that the adult-use market will be a pay-to-play world, where operations financed by out-of-state marijuana companies will use their considerable resources to outlast small Maine start-ups.
“Among the people who voted for legalization, there was a real desire to know who owns these marijuana businesses,” said Melnick, who was political director for the referendum drive. “They wanted them to be locally owned, through and through.”
Her members believe host communities deserve to know basic public health and security measures, but not the details, which if made public would only undercut their desire to feel safe in their communities.
Many of the public safety concerns are overblown, she said. After all, black market marijuana sales have been going on in every Maine municipality for years, usually without notice. A regulated market can only be safer, she argued.
Her clients’ own self-interest should also reassure communities worried about the way marijuana companies will operate. Her clients have sunk so much money into getting a state license that no one would do anything to risk losing it, she said.
Proprietary information, like product recipes, ingredient sourcing or growing soil mixtures, shouldn’t be shared, even with the state, she said. Regulators don’t need this information, which could be hacked or shared with federal law enforcement.
“Don’t forget, cannabis is still illegal on the federal level, so my clients are not too eager to have everything they tell the state to end up in federal hands, either, much less a rival,” Melnick said. “These are real risks not shared by other industries.”
It remains unclear who will decide what information would fall into these exempt categories if the department’s bill becomes law. Towns wouldn’t have access to it, but they could request that information from applicants themselves, if they want it.
Maine’s biggest city, Portland, will be requesting similar information from all of its marijuana business applicants, so it is not concerned about the proposed bill; but if passed, it would not be able to share that information with the public, either.
Like most things marijuana, every state handles this issue differently. California is transparent, posting license information on its state website, while Pennsylvania, a medical marijuana-only state, shields almost everything, including business names.
Andrew Freedman, a national marijuana consultant who is advising Maine, said he faced this dilemma in Colorado, the first U.S. state to legalize, when serving as that state’s first director of marijuana coordination.
“There’s a real policy tension here,” Freedman told Cannabis Wire last year. “For the most part, people want to know how big the industry is, where it’s concentrated, for this information to be part of public dialogue.”
Maine finds itself in the “untenable position” of facing lawsuits over disclosure no matter which decision it makes, Heidrich said, something that is born out in a slew of lawsuits filed in Pennsylvania, Missouri and Nevada, just to name a few.
“We take this very seriously and have proposed these changes so that the Legislature can weigh in on the appropriateness of making these records public,” Heidrich said on Friday.
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