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Medical Marijuana

Lowell pot group sues Greenfield hopeful

A runner-up for Lowell’s medical marijuana slot is suing the state Department of Public Health and challenging its selection of Patriot Care Corp., which is seeking a second license in Greenfield.

The Andover-based nonprofit, Cardiac Arrhythmia Syndromes Foundation Inc., filed a complaint in Suffolk Superior Court against the state Department of Public Health on Monday, alleging that it improperly approved the application of its competitor.

Patriot Care was one of 20 groups awarded provisional licenses from the state and one of six groups invited to seek a license in one of the four counties that did not get a license, including Franklin County.

While Patriot Care was awarded a provisional license in Lowell, its applications for Northampton and Worcester were denied.

The group — made up of members Robert Mayerson of Harvard, Michael Abbott of Nantucket and Nicholas Vita of Nantucket — quickly came to Greenfield and met with Mayor William Martin to discuss its proposal to operate a second dispensary here. The cultivation facility would be centered in South Hadley.

Despite the suit, Patriot Care is still planning to move forward with its application for a Greenfield license.

“We are still planning to come to Greenfield,” said Mayerson. “We expressed that desire to Mayor Martin.”

With its application scored 139 by the state, CAS Foundation claims it finished a close second to Patriot Care, which scored 141, for the Lowell license. But CAS argues that the state made scoring errors that, when corrected, would make it the higher scoring applicant with a score of at least 143.

The complaint also alleges that Patriot Care’s application omits mention of a lawsuit alleging fraud, a judgment for failure to pay taxes and a bankruptcy, all involving Vita, a key executive of the team.

It also charges that Patriot Care’s application did not include three executive team members on its application and as a result they may have evaded background checks.

CAS also claims that the state has yet to produce public records it requested on Feb. 6 that it believes would show whether Patriot disclosed the legal troubles and submitted the forms needed for background checks. The suit seeks relief in the form of immediate responses to the unmet requests for public records. CAS believes the requested documents would show whether Patriot Care should have been disqualified or at least docked points for omissions in its application materials.

If the (Department of Public Health) had been aware of those errors and omissions, it would have scored CAS above Patriot and awarded CAS provisional approval to dispense medical marijuana to patients in Lowell, said Joseph Ruccio, a lawyer for CAS.

Mayerson, chief executive officer and director of Patriot Care, said Wednesday the group disclosed everything that the state required.

“As an organization we value integrity and transparency,” Mayerson said. “We feel we followed the obligations that the DPH put out there. We’re a very open, transparent group.”

Mayerson declined to talk about the specific charges.

CAS, a 6-year-old nonprofit dedicated to providing a variety of medical services on a local, regional and national basis, is asking the court to issue a preliminary injunction requiring the state to produce the requested public records, to rescind Patriot Care’s provisional status and instead grant it to CAS.

“DPH has been inundated with complaints and requests for reviews of applications, so its understandable that they’re pre-occupied,” Ruccio said. “This action seeks to explain the issues and clear the way for DPH to correct the error and give CAS the approval that, on the merits, it deserves.”

In the lawsuit, CAS charges that Patriot Care failed to disclose relevant civil and bankruptcy proceedings involving Vita, the director, treasurer and a member of the executive management team.

Vita currently is a senior partner with Apelles Investment Management LLC, a firm based in New York. He also served as a vice president in the health care department of Goldman Sachs and Co. Inc. Vita lent $1.3 million to Patriot Care, which makes up 100 percent of its working capital.

Along with Abbott, Vita is an executive for three dispensaries in Washington, D.C., and Arizona.

According to CAS’s suit, Vita was named as a defendant in a civil action filed in Harris County District Court in Harris County, Texas, in September 2011 by Wellness Wireless Inc. for $1.8 million and other damages in which Vita, as director of Diabetes of America Inc. is alleged to have engaged in fraud, by omission and gross negligence.

In April 2010, the New York State Department of Taxation and Finance also obtained a tax warrant and judgment against Vita for $22,949 in New York County. And in December 2010, Vita, the chairman of Diabetes of America, filed for bankruptcy.

The lawsuit also charges that Patriot Care failed to list three more people whose roles within the group fall under the state’s scope of executive management team and for whom the state would have been authorized to conduct background checks.

These members are Troy Kaplan, the general manager, Ben Wedeking, the chief horticulturalist, and George Agganis, the chief security officer. The suit also alleges that its competitor classified five more executive members as advisers, allowing them to also circumvent the background check requirement.

“Upon information and belief, Patriot Care failed to disclose these three individuals as additional members of its executive management team and submit background check authorizations for them, and this resulted in DPH’s failure to conduct background checks for these key people. This violates Phase 2 application requirements and should have resulted in Patriot Care being disqualified by DPH,” the lawsuit argues.

The lawsuit is among a growing list of questions and complaints reported in several news outlets about the medical marijuana licensing process. State Rep. Jeffrey Sanchez, charged with investigating the process, has also requested the state to reconsider any applicant that scored higher than 137 out of 163 points in the state’s scoring system on equal footing with the 20 that received provisional licenses. This would include CAS.

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