A judge sealed a hearing transcript Tuesday in the lawsuit involving partners in Hot Springs' only licensed medical marijuana dispensary.
The 173-page transcript Judge Ted Capeheart ordered sealed chronicled the four-hour hearing related to plaintiff Bruce Simpson's petition for a preliminary injunction enjoining Dragan Vicentic from excluding him from business decisions and profit distributions generated by Green Springs Medical LLC dispensary.
Vicentic is CEO and owns a majority interest in the enterprise, according to the dispensary application he submitted. The application listed Simpson as a minority owner and vice chairman/security manager.
Vicentic's attorney filed a motion Tuesday to seal the transcript and any evidence presented at the Oct. 7 hearing in Garland County Circuit Court, arguing their disclosure would jeopardize security at the dispensary and make public Vicentic's financial information. Capeheart agreed, decreeing the transcript contained sensitive business and security information and prohibiting the disclosure of it or any evidence presented at the open hearing without the consent of both parties.
"That is particularly sensitive information, disclosure of which would present a serious risk to dispensary patients, employees and contractors," said the motion to place the information under seal. "To the extent disclosure would increase the risk of crime, it would also create a risk to the public and law enforcement."
State regulators cited the dispensary last month for lax security practices, including failure to maintain video surveillance systems, biometric locks and restricted access to sensitive areas. The offer of settlement the state sent Vicentic proposed a $13,500 fine, with $5,875 suspended upon successful completion of a 180 day probation period. Vicentic declined the settlement and has requested a hearing that has been set for Nov. 15 with the Alcoholic Beverage Control director, the state said Tuesday.
The Sentinel-Record requested a copy of the transcript Oct. 10, but the motion cited the Arkansas Freedom of Information Act provision exempting from disclosure proprietary records related to the medical marijuana industry. The Legislature added it to the state's public records law earlier this year.
The response Vicentic's attorney filed Monday to Simpson's claim that he has been deprived of profits and influence he's entitled to as a corporate officer said he's not a valid member of the corporation Vicentic formed prior to applying for one of 32 dispensary permits issued statewide.
Ownership percentages on the application, which listed Simpson as having a 40% interest, confer no rights to ownership, the response said, asserting that the company's operating agreement gives Vicentic ultimate authority over the business.
A copy of the agreement included with the response listed Vicentic's interest at 60%. The document, which is not signed by Simpson, also listed a $10,000 capital contribution from Vicentic and no financial investment from Simpson.
The response said Simpson's limited investments of money and time do not warrant a financial or managerial stake in the business.
"Simpson's contributions have been of such nominal value by comparison that to award him an ownership interest without a legal right would enforce a gift to Simpson and a forfeiture from Vicentic," the filing, comparing Vicentic's equity in the business -- including working 15 hours a day, preparing the permit application and assuming all financial risks -- to Simpson's, said. "Upon information and belief, at no time between 2016 and August 2019 did Simpson attempt to investigate, secure or exercise any legal right with respect to the application, the permit or Green Springs."
The response said Vicentic and Simpson mutually agreed to part ways in June and denied Simpson's claim that Vicentic offered to purchase Simpson's interest in the business. Simpson's pleading said he was banned from the property after he declined the buyout offer.
An order Capeheart signed Saturday instructed both sides' attorneys to prepare pretrial briefs that include prospects for settlement or resolving the controversy through mediation. The state Supreme Court appointed Capeheart to the case after the county's four circuit judges recused.
Local on 10/23/2019