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Medical marijuana applicant sues state

Seeks records in bidding process

A loser in the contest for medical marijuana licenses in Massachusetts sued the state Department of Public Health Monday, charging that it has failed to release records that would shed light on the increasingly contentious process.

The complaint, filed in Suffolk Superior Court, is the third such lawsuit in the past month that argues that the state’s selection process was riddled by error and failed to detect misrepresentations, prior legal troubles, or conflicts involving some of the successful applicants, issues that might have resulted in disqualification.

Questions about the selection process were raised within hours after the state announced it had chosen the companies for the first 20 provisional licenses on Jan. 31. They were chosen for dispensary operations from a field of 100 applicants.

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“You can’t ignore the public records issue,” said Joseph Ruccio, a Boston attorney representing CAS Foundation, a company that had sought a Lowell license. “The records tie directly into our ability to point out the specific issues with what appear to be a failure [by our competitor] to disclose relevant lawsuits.”

CAS’s suit contends that the Department of Public Health tapped Patriot Care Corp. for a provisional license in Lowell, although Patriot Care’s application appears to omit mention of a lawsuit alleging fraud, a judgment for failure to pay taxes, and a bankruptcy, all involving a key member of Patriot’s team.

Records are attached to the lawsuit indicating that Patriot Care’s director and treasurer, Nicholas Vita, filed for bankruptcy in December 2010 as chairman of a Texas company, Diabetes America Inc. It also shows a 2010 New York state tax judgment against Vita for $22,949, and a separate 2011 lawsuit alleging fraud by Vita and business partners involving Diabetes America.

The CAS suit also asserts that Patriot Care’s application improperly downplayed the roles of several key executives who, as a result, may have evaded background checks. The state required background checks on all members of a company’s executive management team.

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Dennis Kunian, a spokesman for Patriot Care, said his company had not seen the lawsuit, but added: “We are the good guys. We have not only followed everything to the T . . . we will rest on the merits of our application, the merits of our backgrounds, and of our reputations.”

Also in Suffolk Superior Court Monday, a lawyer for two other applicants that were passed over for provisional licenses argued that the Public Health Department is stalling on releasing several critical pieces of information, including documents about a technical review of all applications that was supposed to be done by the department before the material was sent to an outside consultant to score them.

“There should have been some people that were disqualified in that review, but the department just didn’t do it,” said Lesley Rich, attorney for Apex Compassion & Wellness Center, which sought a license in New Bedford, and Striar Center for Compassionate Care, which applied for a Brockton license.

Rich said in a telephone interview that he also asked that the state be compelled to release the scoring documents for all 100 applicants.

Suffolk Superior Court Judge Mary K. Ames did not rule Monday and took the matter under advisement. Rich’s suit asks the court to block the state from issuing final licenses to the 20 applicants selected in January until the issues are settled.

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