Pennsylvania’s medical marijuana bill went into effect in 2016. In order to obtain a permit under that bill, potential medical marijuana grower/processors or dispensaries are required to provide detailed business information with their applications. However, under the state’s Right-to-Know Law (“RTKL”), applicants who can show that information about their security, storage and transportation are trade secrets can avail themselves of an exception to the RTKL and redact trade secrets from applications before they are released to the public.

In May 2017, a PennLive reporter sought all applications that the state had considered under the medical marijuana bill. At that time, six applications submitted by five companies had been approved. When applying for a permit, the company was required to submit redacted and unredacted versions of the applications so that redacted versions could be shared on the Pennsylvania Department of Health (“DOH”) website (along with additional redactions applied by the DOH). PennLive filed suit claiming that the DOH acted improperly in responding to the RTKL request, because it did not review the companies’ redactions and that the companies did not establish that the redacted information fell under an exception.

The Commonwealth Court agreed that the DOH erred in allowing the companies to decide on the redactions, and it is the DOH’s burden to redact—and justify—information that is not subject to disclosure. In order to qualify as a trade secret under the RTKL, the Court considers six factors: (1) the extent to which the information is known outside of the business; (2) the extent to which the information is known by employees and others in the business; (3) the extent of measures taken to guard the secrecy of the information; (4) the value of the information to the business and to competitors; (5) the amount of effort or money expended in developing the information; and (6) the ease or difficulty with which the information could be properly acquired or duplicated by others. Only one applicant, Terrapin, had produced sufficient evidence to show that the redacted information was protectable as trade secrets. Terrapin submitted affidavits showing: a)  the competiveness of the medical marijuana industry, the importance of having the correct nutrient, water and fertilizer combination to get the best growth, and the best methods to extract ingredients that were legal to use in Pennsylvania; and b) that they had taken steps to maintain the secrecy of that information. (The other companies failed to make the requisite showing that they had taken steps to maintain secrecy. They were, however, successful in asserting various other exceptions to the RTKL.)

This case is a good reminder that when submitting confidential and trade secret information to the government, a company should identify it and provide sufficient evidence to keep it confidential if the government receives a public records request.