The whistleblowers initially took their complaints to the executive Office of Special Counsel, which referred the case to OPR. When OPR approached the division with the allegation of impropriety, officials contended that because of their lack of experience assessing the industry, which “was rapidly expanding and consolidating,” the antitrust investigations were appropriate despite claims they were influenced by Attorney General William Barr’s animosity toward the marijuana industry. They also argued that, in contrast to the argument that there were “no competitive concerns” at issue, the federal-state marijuana policy conflict “made it impossible” for them to reach that conclusion in a timely manner.
The investigations resulted in the production of millions of documents from 10 cannabis companies, including MedMen and Pharmacann. Ultimately, across six of the 10 investigations for which data are available, 5,965,000 documents were produced by the marijuana companies under inquiry. The division ended up closing the cases.
“The cannabis industry provided a unique challenge to federal and state regulators alike, and it was reasonable for ATR to seek additional information from the industry through its Second Request process,” OPR said in the memo, which was first reported by Politico. “In addition, contrary to the whistleblowers’ allegations, the documents provided by ATR reflect significant, and successful, negotiations among ATR and the cannabis companies concerning narrowing the scope of the Second Requests.”
“Furthermore, the internal memoranda recommending the closure of the investigations reflect that ATR staff conducted a significant amount of analysis regarding the competitive impact of the proposed mergers, and often explained how the actions of state regulators offset any competitive concerns,” it added.
However, Elias said that what he found “very concerning” about the situation is that Barr reportedly ordered the antitrust investigations out of personal animus and intended to slow the industry’s growth. OPR did not directly respond to that claim, but the memo did state that it agrees the Antitrust Division has significant “latitude” when pursuing these cases.