Vireo Health’s federal marijuana smuggling scandal

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Vireo Health's marijuana smuggling scandal
credit:The Journal News

Felony drug charges against two former officers of Vireo Health, the parent company of the downtown White Plains dispensary, have underscored the blurred line between state and federal marijuana laws.

Minnesota prosecutors accused the officers of using the company’s armored SUV to drive $500,000 of cannabis-based oils to New York, because of difficulties meeting a January 2016 New York state deadline for launching its medical marijuana program, court records show.

The high-profile case has already prompted a legislative push to overhaul Minnesota’s marijuana program and revoke Vireo’s license in that state.

Rep. Nick Zerwas, the Minnesota legislator leading his state’s marijuana reform effort, questioned why state and federal authorities had not charged more people in the Vireo case.

“What would have been their big plan when they got to New York with the cannabis oil?” Zerwas asked rhetorically.

“Clearly they showed up with the product and would have had to act like it fell off the back of a truck and nobody asked a question,” Zerwas said, “It just doesn’t seem to be grounded in reality to say that two employees did this on their own and nobody knew about it.”Vireo declined to discuss the alleged smuggling. Company spokesman Andrew Mangini said Vireo is monitoring both the court case and legislative debate in Minnesota.

The federal Drug Enforcement Administration would not comment on Vireo, citing its policy of not publicly addressing if it is investigating a matter.

The two ex-officers, Ronald Owens and Dr. Laura Bultman, played prominent roles in Vireo winning a license in New York, prompting questions about the company’s license moving forward here.

Bultman was Vireo’s chief medical officer and stated in application documents she would not be in contact with medical marijuana in New York, despite being accused of bringing the drug that was sold to some of the first patients here.

Owens was chief security officer and disclosed being an investor in Vireo, suggesting a potential conflict in his role overseeing the cannabis products. It is difficult to determine his exact stake in the company and other details because marijuana program documents in New York were redacted by state regulators, who cited privacy laws.

Department of Health marijuana regulators declined to discuss the case, citing their ongoing investigation into the incident.

Still, Vireo’s winning application in New York had repeatedly touted Bultman’s reputation as a medical marijuana expert and Owens’ law enforcement background to apparently ease concerns about public safety.

“Transportation of medical cannabis products can present a significant risk,” the company wrote, “as a former Secret Service Agent, our security Director Mr. Owens has extensive experience in high-risk transportation, and will be overseeing a team of security officers specially trained for that task.”

The Secret Service confirmed Owens had worked for the federal agency but refused to discuss the Vireo situation, citing privacy laws. Owens also previously worked for the City of St. Charles Police Department in Missouri as a police officer, at an annual salary of $72,802, according to city records obtained by The Journal News through a public information request.

Officials at the St. Charles Police Department, citing privacy law, declined to answer questions about Owens’ statements in New York marijuana program documents that his positions included detective, crime-scene analysis and patrol officer.

Further, the scandal comes after state DOH regulators approved Vireo Health as the first medical marijuana home-delivery company in New York.

Bultman and Owens were both charged in their roles at Minnesota Medical Solutions, an affiliate of Vireo Health, which is the parent company of Vireo Health of New York, one of five companies licensed to grow and sell medical marijuana in New York.

Trouble with the law

Paul Engh, Bultman’s attorney, has filed a motion to dismiss the charges, citing gaps in Minnesota’s state marijuana law and other issues related to legal problems affecting state-licensed businesses that remain illegal under federal law.

Legal ambiguity has been a problem for marijuana businesses nationally, as the federal prohibition limits access to traditional banking and health insurance, which exposes companies to fraud and other abuse.

Confusion about health insurance, for instance, prompted state regulators this month to clarify when and how insurers should pay for doctor visits that include marijuana recommendations.

Meanwhile, federal law enforcement’s laissez-faire approach is tied to a Justice Department memo in 2013 that focused on preventing sale to minors, interstate smuggling and using cannabis-based profits in connection to other crimes.

Owens could not be reached for comment and his attorney, Ryan Garry, did not respond to phone messages.

The case involves felony charges of intentionally transfer medical cannabis to person other than allowed by Minnesota state law, court documents show. Each count carries sentences of up to two years and a $3,000 fine.

credit:lohud.com

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