The Town of Payson has refused to release the business plan for the upcoming medical marijuana dispensary in town.
The Payson Roundup requested Desert Medical Campus’ Medical Marijuana Ordinance Administrative Application from the town in late March under the Arizona Public Records Act. The town furnished all but a 48-page business plan in that packet.
Town Attorney Tim Wright said he would not release the plan due to privacy issues of the business and cited several other legal cases where the court upheld record refusals.
The Roundup reached out to the Arizona Ombudsman’s Office, which acts as a citizens’ aide in public access disputes with state or local governments.
Attorney Catherine Marquoit, assistant Arizona ombudsman for public access, said she reviewed Wright’s arguments and while she could not see two of them standing up in court, she wasn’t sure about his privacy claim.
According to the Arizona Attorney General’s Office Agency Handbook, most records are open to public inspection; with the law favoring access. However, legitimate government considerations of privacy outweigh this presumption.
“The Arizona courts have long recognized personal privacy as an exception to the general rule requiring access to government records,” according to the handbook. “Under this exception, the custodian has discretion to deny public inspection when the disclosure would invade privacy and that invasion outweighs the public’s right to know.”
Wright said releasing the business plan would invade Desert Medical Campus’ (DMC) privacy because it contains specific competitive strategies and plans.
“Businesses develop business plans for many purposes,” he wrote in a e-mail. “One of these purposes is to have a competitive advantage over other companies, whether direct or indirect competition .... These plans are traditionally considered confidential, proprietary, or possibly even in the nature of a trade secret.”
Under the Arizona Medical Marijuana Act, there can only be one medical marijuana dispensary in northern Gila County, limiting the dispensary’s competition to those dispensaries many miles away.
Still, Wright maintained “the town believes that DMC’s interests in its proprietary business plan outweighs the public’s right to know (what competitive strategies DMC will utilize) for this limited portion of its application.”
Marquoit said she had never heard the privacy argument applied to an entity. She said agencies usually cite it to protect the privacy of an individual, such as the home address of a police officer.
And she couldn’t find any case laws where that logic had been applied successfully. For that reason, she could not make a definitive conclusion.
She said the Roundup could seek legal action arguing for the release of the record. The Roundup did not pursue requesting the record from the Arizona Department of Health Services, which runs the medical marijuana program, because it is not required to release any records. Under the state’s Medical Marijuana Act, information received for the purposes of administering the act, including applications, are confidential.
Based on application requirements, DMC’s business plan likely includes information relating to expenditures to open and operate; projected revenue and if any outside entities have given monies or assets to operate.
Wright argued that the Roundup would want to keep its business plan private in order to maintain a competitive advantage.
“I am sure you can appreciate that if the Roundup just so happened to be in a highly regulated industry where it was required to submit its business plan to a governmental entity, it would not want any other competitor (be it another newspaper or other media outlet) to be able to obtain it,” he wrote. “I realize that the Roundup is not seeking this information to compete with DMC, but the analysis is the same regardless of who makes a request — does the public’s right to know outweigh the privacy interests of the person or entity.”
Interestingly, on the Arizona Department of Health Services Web site’s frequently asked questions, someone asked, “I did not receive a registration certificate for a nonprofit medical marijuana dispensary in the Payson CHAA (Community Health Analysis Areas). Can I see the business plan for the applicant that was awarded a registration certificate in the Payson CHAA?”
This question did not come from the Roundup.