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Ohio auditor finds 'critical flaws' in state's review of medical pot grow applications

Posted at 3:24 PM, Feb 13, 2018
and last updated 2018-02-13 15:32:54-05

COLUMBUS, Ohio -- A state-based system for awarding medical marijuana cultivation licenses isn't reliable because of a "critical flaw" in the scoring process, Ohio's auditor Dave Yost said.

Yost detailed the flaw, and other problems his office found, in a Feb. 6 letter he sent to Ohio's Department of Commerce director Jaqueline Williams, whose office is overseeing the licensing of marijuana cultivators across the state.

Last fall, Ohio awarded business licenses to 24 firms to be among the first companies to legally grow medical marijuana in the state. More than 100 firms applied for a license. Those that landed a license had the highest scoring applications based on outlined business plans, security measures, quality control efforts and financial plans, commerce officials said at the time.

According to Yost's letter, during the scoring process, at least two Commerce employees had unlimited access to online accounts of application reviewers and the application documents. Those same employees created user names and passwords for the application reviewers and had the ability to access accounts at any time. Yost said that "weakness" prevented auditors from being able to tell if revisions to records were made by the reviewer or someone else with access to the account.

"Because of this critical flaw in the procedures design, neither this office, nor the public, can rely upon the cultivator application score results," Yost wrote.

In a statement to WCPO, spokeswoman Stephanie Gostomski said the Commerce Department has already implemented changes to better secure user names and passwords.

"While the auditor's office hasn't completed its review, we are continuing to separately perform a full internal review of all of our process to ensure accuracy, efficiency and security," Gostomski wrote in an email to WCPO.

The auditor's findings stem from a review his office launched following concerns thatDowntown-based CannAscend raised about the scoring process.

The firm, which local investor James Gould leads, was denied a cultivation license. Gould said his team has uncovered other flaws in the state's review process, including overlooking missing documentation -- such as background checks for employees in winning applications. Gould's firm also alleges that at least one applicant was given information that gave that firm a competitive advantage.

"We've been calling for a review for months, and not just because we're sore losers," Gould said. "This is all just wrong, and I agree that the scores should be thrown out."