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Delahunt sues over marijuana rejection

Former US Representative William Delahunt wants state regulators to issue him coveted licenses to run three medical marijuana facilities.

Bill Greene/Globe Staff/File 2010

Former US Representative William Delahunt wants state regulators to issue him coveted licenses to run three medical marijuana facilities.

Former US representative William Delahunt is asking a court to force state regulators to give him coveted licenses to run medical marijuana dispensaries in Plymouth, Masphee, and Taunton.

In a lawsuit filed this week in Suffolk Superior Court, Delahunt’s company, Medical Marijuana of Massachusetts, argues that state regulators broke their own rules and reacted unreasonably to negative publicity when they reversed themselves and rejected the company’s bid to open three dispensaries after initially granting approval in January.

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The Delahunt company argues that the Department of Public Health’s reversal in June was arbitrary and capricious because it was based on publicity considerations rather than the merits of the company’s applications. It also said the health department’s about-face was without regulatory or statutory authority and without any form of due process.

The lawsuit, filed against state health commissioner Cheryl Bartlett, is the latest chapter in the state’s fraught effort to select medical marijuana dispensaries.

State regulators notified Delahunt’s company in June that the firm was denied licenses because it planned to divert excessive revenues to a management company associated with Delahunt, and made incorrect representations on its application that suggested it had support from state Senate President Therese Murray.

Delahunt’s initial application for a license stated that the dispensary intended to give 50 percent of its revenue to a management firm that was controlled by Delahunt and his business partners in the dispensary. The company later revised that to 25 percent after the Globe detailed the original arrangement.

A letter from the marijuana company’s lawyer to Bartlett, which is included in the lawsuit, states that the health department failed to request key financial information regarding the payments to Delahunt’s separate management company before rejecting the dispensary application.

Delahunt’s lawsuit is among at least a half-dozen lawsuits filed by rejected applicants.

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The letter said the management firm, Triple M Management Co. LLC, had spent $860,000 by late June supporting the startup costs of Delahunt’s three dispensaries before state regulators jilted them.

A health department spokeswoman on Wednesday said Bartlett was unavailable for an interview and instead released a statement defending the selection process. Delahunt’s lawsuit is among at least a half-dozen lawsuits filed by rejected applicants. None of the companies to date have succeeded in their challenges.

“We are pleased that multiple courts have validated our comprehensive process to ensure patient access and public safety across the Commonwealth,” the health department statement said. “We are focused on moving forward.”

A further window into the dispensary selection process was opened Wednesday with the release of private e-mails from Bartlett that were obtained by the Globe under a public records request.

The Bartlett e-mails portray an agency acutely concerned about its image during the contentious selection process, and reveal that the health commissioner is searching for a job outside the administration of Governor Deval Patrick amid mounting questions about her past friendship with Delahunt. The e-mails suggest a concerted effort to blunt criticism about the selection process and to “manage the message and the story.”

One e-mail from Bartlett called into question the role of the governor in selecting dispensaries.

Bartlett said the state health official overseeing the medical marijuana program decided which companies should receive provisional licenses “with directives from both the [state health] secretary and governor.”

But Patrick spokeswoman Jesse Mermell said that was not true.

“Governor Patrick was briefed on the general progress of the Medical Use of Marijuana Program’s selection process but played no role in the advancement or rejection of applicants,” she said.

On Wednesday, Bartlett issued a statement saying that her e-mail was inaccurate.

“Neither the secretary nor the governor gave the [marijuana program] executive director directives related to any applicant moving forward in the process,” Bartlett said. “I regret that I made this misstatement about the selection process.”

The e-mail referencing the governor’s role was written to a headhunter working on behalf of Cape Abilities, which provides services for disabled Cape Cod residents. Bartlett was being considered for the chief executive position there, and a partner at the executive headhunting firm told Bartlett there were concerns about her friendship with Delahunt.

Officials at Cape Abilities were concerned about Bartlett’s financial donations to a political action committee supporting Delahunt’s congressional campaign in 2007, and fund-raisers she hosted for him in 2005 and 2006, as detailed in Globe stories.

Bartlett responded in the e-mail to the headhunter that the donations were made long before medical marijuana was “on the horizon” in Massachusetts. She also said in that e-mail that the State Ethics Commission had conducted an investigation about the matter and closed the case without further action.

More than six months ago, the Globe filed a public records request, seeking copies of e-mails from or to Bartlett’s department and private accounts that included mention of Delahunt, his marijuana company, or his management firm dating to March 2013.

On Wednesday, the agency released selected e-mails, some with the contents entirely blacked out, dating only to November 2013. Several of the e-mails from Bartlett to staff members and other unknown recipients note media coverage of the dispensary selection process, and Bartlett’s friendship with Delahunt.

In the e-mail to the headhunter, Bartlett said she knew many people involved in companies seeking dispensary licenses and reviewed all of those relationships with her legal team. She said Delahunt helped her raise money for the Nantucket AIDS Network and secure a piece of federal property to establish a homeless shelter for substance abusers and the mentally ill.

Bartlett wrote in her e-mail that she was shocked by complaints that Delahunt benefited from their ties after he won preliminary approval to open three dispensaries.

“I was shocked at the nasty exchanges that went down and the pointing fingers at one another and found myself in the epicenter of the attacks,” Bartlett wrote.

“It took me inner strength to keep my head high and to know I did not do anything wrong.”

More coverage:

Mass. drops flawed marijuana applicants

Delahunt group would rewap from licensing deal

Links to Delahunt disclosed late in marijuana bidding

Kay Lazar can be reached at Kay.Lazar@globe.com. Shelley Murphy can be reached at Shelley.Murphy@globe.com.

Correction: An earlier version of this story incorrectly identified one of the three communities where William Delahunt is seeking licenses for medical marijuana facilities.

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