The company that Iowa licensed to produce medical marijuana is fighting to keep big chunks of its application secret

A Des Moines company that intends to produce medical marijuana is seeking a court order to keep large portions of its licensing application secret.

MedPharm Iowa is the only company that responded to the state’s request for bids following passage last year of a state law that allows the Iowa Department of Public Health to license up to two medical-cannabis production companies.

The company — owned by Chris Nelson, the president of the food supplement company Kemin Industries — supplied the Health Department last year with two versions of its bid: One for the public and another for the health agency.

At least half of the information on 255 pages of the 465-page application it provided for the public is redacted, including dozens of pages so heavily redacted that it is impossible to see any portion.

Some of the blackouts appear to block information about standard operating procedures such as product recall policies, product labeling procedures, the responsibilities of the company’s “quality unit” and how it assesses health hazards.

On Dec. 18, Doug Glendenning, a manager of Cannabis & Glass in Spokane, Washington, requested that the state provide him with an unredacted copy of MedPharm's application.

In response to Glendenning’s request, the Health Department on Dec. 26 alerted Elizabeth Nelson, an organizer of MedPharm. Department officials planned to release the unredacted version in 72 hours unless the company sought “injunctive relief” through a court process, the Dec. 26 email notice said.

MedPharm filed a petition Dec. 28 in Polk County District Court, saying the redacted information is a trade secret that "could give advantage to competitors and serves no public purpose."

“These trade secrets and competitive advantage would be destroyed if the requested information is made available to MedPharm Iowa’s competitors or the general public,” the company said in its Dec. 28 petition.

Glendenning, the Washington marijuana producer, declined to answer the Register's questions about his request for an unredacted version of MedPharm’s application.

“It’s a very simple public information request,” Glendenning said. “It’s completely out of my realm of understanding why it’s at the stage it’s at right now.”

Secret bid policy previously halted

It's unclear when Iowa first allowed private companies to determine what information is available to taxpayers in the "public bid" process.

Officials from the administrations of former governors Tom Vilsack and Chet Culver said in 2015 that they do not believe the practice was used while they were in office before January 2011.

The redaction policy became an issue in 2015 when some companies vying for multi-million dollar contracts to manage Iowa’s Medicaid redacted from public view the executive summaries of their bids, the name of chief executives, their response to how they might provide "meaningful engagement" with the public and a list of other states whose Medicaid programs they already help manage.

The Iowa Department of Administrative Services ultimately released unredacted copies of the Medicaid bids. And, in response to the 2015 redaction issues, the Iowa Department of Administrative Services in 2016 changed its policy to require bidders to justify redactions or face the possibility that their proposal is tossed out.

The office of Terry Branstad — who was resumed as Iowa's governor in 2011 — issued a statement in 2016 that said the governor was "pleased" with the change.

A check of several Midwest states shows that businesses are given an opportunity to request redactions of information that could be considered trade secrets.

But the processes in those states are far more controlled than in Iowa, where bidders are allowed to submit public and private versions of their applications.

In Wisconsin, for example, bidders seeking to do business with the state may fill out a proprietary information form that allows bidders to list the specific information it wants the state to withhold from the public.

The form defines the term “trade secret” and clearly states that information outside that definition cannot be kept confidential.

Minnesota has a similar form and practice as Wisconsin that is reviewed by the state’s Materials Management Division. Businesses can’t simply declare information a trade secret or confidential to keep it from the public.

Medpharm: Info could aid competitors

Questions to the Iowa Department of Public Health were not immediately answered this week. It remains unclear why medical marijuana applicants were allowed in the department's bid document instructions to create separate versions of their proposals. It also remains unknown whether the department asked Medpharm — the only applicant — to justify the public redactions.

The records are important because they help hold elected leaders accountable, said Randy Evans, director of the Iowa Freedom of Information Council.

“I don’t know how citizens can make a determination” about whether MedPharm’s proposal is beneficial or harmful to the state “if they are being cut off from large sections of the proposal,” Evans said.

“Trade secret” in Iowa law includes programs, techniques or processes that derive actual or potential economic value. Iowa’s public records law contains an exemption that allows the state to withhold such information, according to court documents filed by Medpharm.

MedPharm officials believe that the redacted information is valuable and is not generally available to its competitors, said Lauren Burt, a spokeswoman for Kemin Industries who responded on behalf of MedPharm.

"MedPharm was the sole applicant in this, and obviously there is room for one more license to be granted," Burt said. “The information could probably be used by someone else.

"Anytime someone does a first model of something, you want to make sure the information is protected. I think any business — public or private — would do the same.”