Charges: Minn. medical marijuana execs illegally distributed oils

Medical marijuana sold in MN will be smoke-free
Smoke-free medical marijuana, sold as pills, oils or tinctures produced at Minnesota Medical Solutions in Otsego May, 5 2015.
Jennifer Simonson | MPR News 2015

Updated: 6:58 p.m. | Posted: 1:38 p.m.

The Wright County Attorney's office has brought felony charges against two former employees of Otsego-based Minnesota Medical Solutions, saying they smuggled concentrated marijuana oils out of state to aid their parent company.

According to the complaint filed Monday, Ronald Owens, who worked as security director of Minnesota Medical Solutions, and Laura Bultman, the company's former chief medical officer, conspired in December 2015 to transport 5.6 kilograms of concentrated marijuana oils from its Otsego, Minn. facility to New York because parent company Vireo Health was struggling to meet a production deadline for facilities licensed in New York state.

"Vireo Health had to produce a certain type of THC-concentrated oil in the state of New York. Through their cultivation process they were not able to do so. They were behind, and that's why they needed the oils in Minnesota," said Brian Lutes, Wright County's chief criminal prosecutor.

Lutes said charges against a third company officer are still being considered. He also said New York is currently investigating the case in New York and that Minnesota authorities are sharing information with investigators in that state.

Bultman who left the company in September, declined comment. Her attorney, Paul Engh said the charges "are unfounded on the facts, and untenable under the law."

In a statement, Vireo Health said, "when we became aware of the possibility that one or more individuals may have acted in ways contrary to the laws of the state and to our own policies and procedures, we acted immediately to investigate the allegations, communicate with our regulators and take appropriate action."

The company added it take its legal obligations seriously and will cooperate with the agencies investigating.

The criminal complaint said Owens, Bultman and other employees of Vireo Health were concerned that New York's facility would face a shortfall of supply because three out of the five marijuana plants being grown and cultivated in New York "could not produce the correct amount of THC and CBD for medical marijuana."

The employees met in a secure vault on Dec. 5, 2015 and decided that marijuana oil manufactured in Minnesota could "rescue New York." The complaint said Bultman told the other employees that she would get four to five jars of oil, valued at $500,000, to New York and then "make the inventory disappear."

The complaint said Owens and Bultman later drove the oil to New York in the company's armored vehicle.

Court documents say investigators were informed of the allegations by Daniel Pella, the former chief scientific officer at Minnesota Medical Solutions. The complaint said Pella was terminated by Minnesota Medical Solutions in April, 2016.

Owens, who is no longer listed as an employee on Minnesota Medical Solutions website, directed questions on the matter to his attorney.

"We plan to aggressively fight these charges. Mr. Owens is completely innocent," his attorney Ryan Garry said in an email.

An older version of Owens' biography on the company's website said he worked in law enforcement since 1993 on both the local and federal levels, including narcotics. He also stressed the security of Minnesota Medical Solutions' Otsego facility in May, 2015. Owens, who told reporters he worked for the U.S. Secret Service, insisted the facility, located about 40 miles northwest of Minneapolis, is safe.

"We are armed continually with security 24-7 on site," he said. "We have constant surveillance on not only just our facility, but our dispensaries as well," he said in May, 2015.

Minnesota Medical Solutions is one of two medical marijuana companies approved to grow, manufacture and dispense medical marijuana in Minnesota. State law forbids the companies from selling the leaf form of marijuana. Instead, the company cultivates the plant into pill, liquid or vapor form for patients.

The Minnesota Department of Health said in a statement Monday that it knew of the smuggling allegation and shared information with authorities.

A department spokesperson couldn't say if the company's license is in jeopardy as a result of the charges. The state's two registered medical cannabis manufacturers — Minnesota Medical Solutions and LeafLine Labs — must face a state review and re-registration process by Dec. 1.

The agency has cited Minnesota Medical Solutions for several violations in 2016.

According to public documents obtained through the open records law, the violations include bringing a dog into the facility and allowing an employee to chew tobacco and carry a spit can in the presence of plants.

The department also said employees failed to limit contamination of its marijuana plants and failed to limit the growth of microorganisms growing on the plants. An agency spokesperson said patient safety was not compromised and the company was not fined.

Minnesota Medical Solutions CEO, Kyle Kingsley objected to the findings. Kingsley sent a Dec. 7, 2016 memo to the state Health Department saying the presence of a dog at the facility did not present any sanitary issues and said using smokeless tobacco in the facility "is not inherently unsanitary." Kingsley also said his company's products are safe.

"Since the inception of the Minnesota medical cannabis program, all MinnMed's products have been safety tested in accordance with the guidelines provided by the OMC [Office of Medical Cannabis]," he wrote. "MinnMed's products have passed every single safety test."

The department did not fine the company for the violations but a spokesperson said the agency stands by its findings.