COLUMBUS, Ohio – A Cuyahoga County judge has ordered the state to award a certificate of operation to The Botanist dispensary in Cleveland while Ohio and the medical marijuana company battle out a separate legal issue in a Franklin County court.

The Botanist, at 3865 Lakeside Ave., could open this week, said Kate Nelson, chief operating officer of Greenleaf Apothecaries, the company that owns the stores.

It unknown whether the Ohio Board of Pharmacy, the state agency that gives dispensaries the certificates of operation to open their doors, will appeal the ruling of Cuyahoga County Common Pleas Judge Nancy Fuerst. A board spokesman said he could not comment due to the ongoing legal proceedings.

The dispensary had not received a certificate of operation as of Monday afternoon.

Judge’s order

Fuerst’s order states The Botanist passed an inspection March 6.

However, company representatives couldn’t submit its intent to operate and pay a fee for the two-year certificate of operation through the Board of Pharmacy’s online portal because it was blocked by the state.

“The board later revealed it would not issue a certificate of operation to the Cleveland dispensary because the board had concerns relating to the ownership of Greenleaf,” Fuerst’s order states.

The ownership question has to do with whether a Greenleaf deal in March with a large marijuana company, Acreage Holdings, is a management arrangement or represents a change in ownership. At risk for Greenleaf is its dispensaries’ licenses, which could be yanked by the state.

In June the board began an administrative proceeding to deal with the ownership issue, which has since ended up in Franklin County Common Pleas Court.

Fuerst ruled that in the meantime, The Botanist has a clear right to a certificate of operation because it otherwise didn’t have an adequate remedy while waiting for the ownership issue to be sorted out.

Other dispensaries

Greenleaf runs The Botanist dispensaries in Canton and Wickliffe, which remain open during the lawsuit.

There are also The Botanist dispensaries with provisional licenses in Akron and Columbus, which Thomas Haren, an attorney for Greenleaf said passed inspections like the Cleveland location and should have been awarded certificates of operation.

Haren said the company is weighing whether to take the state to court to receive certificates of operation for those two dispensaries.

Ownership issue

Many of the filings in Franklin County are not public, since Greenleaf wants them under wraps, claiming they involve trade secret information.

However, one of the filings shows the state’s position: That the pharmacy board has long told companies applying for dispensary licenses that they must run their businesses as promised on their applications.

“To avoid the situation where licensees immediately sold their dispensaries after winning a license, the Board required that a dispensary had to have a certificate of operation (i.e. actually selling product) for one year and receive prior approval from the Board before there could be a change in ownership,” the court filing states.

State rules specified a change in ownership could also mean a change in the entity that’s operating the dispensary, the board argues.

Acreage Holdings, a publicly traded company on the Canadian Securities Exchange, isn’t licensed to run dispensaries in Ohio, it states.

Greenleaf takes a different position on the matter.

When the state subpoenaed Greenleaf, asking for all documents and emails related to the Acreage transaction, Greenleaf claimed they’re a trade secret.

But according to a Canadian Securities regulatory filing, the agreement with Acreage Holdings requires it to advise and assist in the operations of the five Ohio dispensaries, as well as a cultivation and processing facility in Middlefield – “providing expertise, branding and design aesthetics, vendor relationships, and technical know-how while the licensed operators, Greenleaf Gardens, LLC, Greenleaf Therapeutics, LLC and Greenleaf Apothecaries LLC maintain operational control."

Acreage doesn’t have equity or ownership interest in the licensed businesses and won’t unless it gets necessary approvals from the Board of Pharmacy, the regulatory filing said.

“Greenleaf is obviously frustrated by the Board’s decision to issue these meritless Notices, which have unnecessarily delayed the opening of three of the highest scoring dispensaries – in three of the state’s highest population centers – at a time when too many Ohio patients lack access to the medicine they need,” attorn the Greenleaf attorney, said in a statement.