State reports weed out medical pot growers' 'trade secrets'

Minnesota's leap into the era of legal weed began with the selection last week of two companies that will grow, process and sell medical cannabis to patients.

LeafLine Labs and Minnesota Medical Solutions proved to the state that they had the financial wherewithal, technical prowess and security procedures to do the job.

But if you want to know the details, you're out of luck.

Much of that information has been redacted from the companies' applications, which have been posted on the website of the state Department of Health. They're considered trade secrets, nonpublic business data or sensitive security information. Minnesota law allows the state to keep that information from us.

Once again, corporate secrecy rules, even when companies get permission to operate without competition.

Kurtis Hanna, an independent cannabis activist in Minneapolis, has filed numerous records requests about the state's medical marijuana policy. He has often received heavily redacted records in response, or none at all. Hanna said the public should be "really frustrated and upset" that they can't find out how much money these companies stand to earn.

"We're talking about a duopoly," Hanna said. "We've got two companies that are going to be anointed by the state and run businesses here and make a profit off individuals who are sick."

"We're not contracting with manufacturers to create cannabis on behalf of the state of Minnesota," Munson-Regala said. "It's sort of a de facto license."

That's true. It's also true that the state expects to spend $2.9 million by June 2015 setting up its medical cannabis program, according to the Legislature's fiscal note.

"I don't think anyone considered it was done for their [the cannabis companies'] benefit," Munson-Regala said. "It was done for the benefit of the patients they will be serving."

The applicant companies all had to open their books and their secret sauces to the state in order to be in the running. But they didn't want their information to go any further, so they asked the state to keep large portions under wraps under the "trade secret," "business data" and "security information" provisions of the state's public records law.

In its application, LeafLine Labs specified what it considered a trade secret, including its floor plans, which "are integral to our security and reveal our separate grow rooms, our lighting protocol, our security systems, the interrelationships between propagation areas, veg areas and flower areas, extraction areas, etc."

The state didn't go along with all of it, but still, gray blocks cover dozens of records that could give the public an understanding of what they're inviting into the state.

One of the medical cannabis bill's sponsors, Rep. Dan Schoen, DFL-St. Paul Park, said his main goal was to create a program that would succeed and "not turn into the boogeyman of reefer madness." He's comfortable with honoring the companies' request for secrecy because a committee of qualified people reviewed the applications.

In coming weeks, Munson-Regala said, the state will post loads of information about all of the applicant companies and how the state rated each one in choosing the two winners. He called it "more than enough information for people to chew on to their heart's content."

The prospective price range has become public. Minnesota Medical Solutions estimates $50 to $100 per gram, with patients using anywhere from 2 to 10 grams of oil each month. LeafLine puts the average cost at $85 per gram for "high-grade extract," and an estimated cost per patient of $250 to $500 per month.

Otherwise, "we are not publicly disclosing detailed financial forecasts or information at this time," the company said.