STATE OF MINNESOTA

DISTRICT COURT

COUNTY OF WRIGHT

TENTH JUDICIAL DISTRICT
Case Type: Crim/Traf Mandatory

State of Minnesota,

Court File Number: 86-CR-17-499 &
86-CR-17-500

Plaintiff,
vs.
Laura Lynn Bultman, Ronald Dale Owens

FINDINGS OF FACT,
CONCLUSIONS OF LAW,
AND ORDER DENYING MOTION FOR
FRANKS HEARING, DENYING
MOTION TO DIMISS, DENYING
MOTION FOR JOINDER

Defendants.

The above-entitled matter came on for a hearing on June 1, 2018 before the Honorable
Michele A. Davis, Judge of District Court, at the Wright County Government Center in Buffalo,
Minnesota. Assistant County Attorney Shane Simonds appeared on behalf of Plaintiff. Attorney
Paul C. Engh appeared on behalf of Defendant Bultman. Attorney Ryan Patrick Garry appeared
on behalf of Defendant Owens.
Based upon all of the reports, files and records herein, arguments of counsel, and after
being fully advised, the Court makes the following:
FINDINGS OF FACT
1.

On April 21, 2016, Senior Special Agent Robert Nance and Special Agent Jake

May of the Minnesota Bureau of Criminal Apprehension met with officials from the Minnesota
Department of Health’s Office of Medical Cannabis. The officials informed the agents that
individuals at Minnesota Medical Solutions (MMS), a subsidiary of Vireo Health, were potentially
involved in diverting a large amount of THC/CBD concentrated oil from the MMS grow facility
in Otsego, Wright County, to a sister Vireo Health organization in the State of New York in
December 2015.

 2.

MMS, as well as Vireo Health in New York, used a computer system called

BioTrack to track marijuana production. Officials from the Office of Medical Cannabis acquired
a screenshot of a BioTrack entry that purported to show an outbound transfer to the Minneapolis
Cannabis Patient Center of 372 gram of “6060 concentrated oil mixed” made on December 10,
2015. The screenshot was provided to the Office of Medical Cannabis by Daniel Pella, the former
Chief Scientific Officer of MMS. The screenshot showed the outbound entry was made by Dr.
Laura Lynn Bultman, who was, at the time, MMS’ Chief Medical Officer. SSA Nance and SA
May were informed that the Minneapolis Cannaibis Patient Center, where the cannabis oil was
purportedly sent, can only sell pills and liquid capsules and therefore there would be no reason to
ship it there.
3.

SSA Nance and SA May interviewed Daniel Pella. Pella informed the agents that

during the first week of December 2015, he was sent to Vireo Health’s New York facility to
oversee the cultivation of medical marijuana plants. During that time, Pella concluded that three
out of five plant strains in New York could not produce the correct amount of THC and CBD for
medical marijuana. Pella believed this may cause a supply shortfall in New York. Pella returned
to Minnesota on December 15, 2015, where he informed Defendant Bultman and Robert Shimpa,
Chief Operating Officer of MMS at the time, of the problems in New York. Mr. Shimpa requested
a meeting with Pella to identify THC oil that could rescue New York. Mr. Pella identified four to
five jars of concentrated oil that could help rehabilitate the plants in New York. Defendant
Bultman, according to Pella, informed the group that was meeting that she would drive the jars of
THC to the New York Facility using MMS’ armored vehicle, give the jars to Eric Greenbaum, the
lab manager in New York, and then make the inventory disappear. Pella believed the jars made it
to New York.

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 4.

On May 4, 2016, the Minnesota Department of Health conducted an inspection of

the MMS facility. Megan Thompson, the Operations Supervisor for the Office of Medical
Cannabis, requested an inventory transfer list covering the dates of December 1, 2015 to December
30, 2015. Defendant Bultman provided Thompson with a seven page inventory transfer list. Later
that same day, Thompson met with MMS Lead Pharmacist Brian Harvey and requested another
copy of the inventory transfer list. Lead Pharmacist Harvey complied. This new list contained eight
pages. The page omitted from the list provided by Defendant Bultman contained transfer records
from December 16, 2015, which included five outbound transfers from the Otsego facility. The
BioTrack inventory report showed five outbound transfers from December 16, 2015 of 1,253.75
grams, 755 grams, 971 grams, 75 grams, and 953 grams of concentrated oils respectively. These
outbound transfers were made by Defendant Bultman. The BioTrack report did not reveal a
destination or vendor for the transfers.
5.

On May 16, 2016, SA May filed two applications for two search warrants and

supporting affidavits with the district court in Hennepin County. The applications requested
authority to enter the MMS Minneapolis Patient Dispensary Center to search for certain items. The
affidavit does not list Mr. Pella by name, but lists him as “CC1” and states that he was MMS’
former Chief Scientific Officer and that his position with MMS was terminated for “dire financial
reasons”. The affidavit lists the Minnesota Department of Health’s inspection and the discrepancy
found between the transfer list provided by Defendant Bultman and the transfer list provided by
Lead Pharmacist Harvey.
6.

On May 19, 2016, Special Agent Rittmiller conducted a search of the MMS Patient

Center pursuant to the search warrant. SA Rittmiller spoke with Mr. Harvey and Kari Sky, a lead
Pharmacist for MMS. Mr. Harvey told SA Rittmiller that the only THC oil not in patient dosage

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 was representative samples of one-half to two milliliters of THC oil which is used for quality
analysis. Sky confirmed that all of the shipments sent to the dispensary consisted of capsules, oral
solutions, and vaporizers cartridges and that the Patient Center does not have the means to store a
bulk shipment or convert the oil into forms for patients. She stated that if the bulk shipment was
sent, the procedure would be to refuse to accept it.
7.

On May 19, 2016, SSA Nance and SA May conducted a search pursuant to the

search warrant for the grow facility in Otsego. The agents interviewed John Purdes during their
search. Mr. Purdes is a manufacturing technician who converted oil solutions to finished products.
Mr. Purdes stated that he was at the New York facility the week before Christmas 2015 to assist
converting the oil into final products. He believed that the oil had been produced in the lab in New
York, but observed that the jars containing the concentrated oils were labeled in the same manner
as the jars in Minnesota. Defendant Bultman, Mr. Shimpa, a horticulturist, and Mr. Carter, the
Head Grower for MMS, were all at the New York facility at this time.
8.

On February 6, 2017, a criminal complaint was filed against Laura Lynn Bultman

and Ronald Dale Owens listing two counts of criminal charges relating to the transfer of THC/CBD
(cannabididoil) concentrated oil from MMS’ grow facility in Otsego to Vireo Health’s dispensary
in New York State in 2015. MMS is a subsidiary of Vireo Health.
9.

On April 13, 2018, the State of Minnesota filed a motion for joinder, asking the

court to join Defendant’s Bultman and Owens to the action for trial under Minnesota Rule of
Criminal Procedure 7.03 subd. 2.
10.

An amended complaint was filed on April 23, 2018 listing a third count of

conspiracy.

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 11.

On May 15, 2018, Defendant Bultman filed a memorandum in opposition to the

State’s joinder motion, a motion to suppress, and a motion to dismiss.
12.

On May 17, 2018, Defendant Owens filed a motion to dismiss, a motion for a

Franks hearing, and a memorandum in opposition to the State’s motion for joinder.
13.

On June 6, 2018, a motion hearing was held on Plaintiff’s motion for joinder and

Defendant’s motions for a Franks hearing, for a motion to suppress, and a motion to dismiss. At
the hearing oral arguments were made by Plaintiff and Defendants, and exhibits were accepted.
The Court accepted the partial transcript of a two day hearing held on March 8, 2018 before the
Honorable Judge John J. Leidig, an Administrative Law Judge of the Maryland Office of
Administrative Hearings. The two day hearing was held over March 7 and March 8 2018, but the
transcript only covered the testimony from March 8, 2018.
14.

At the March 8, 2018 hearing, Judge Leidig heard testimony from Vireo Health

CEO, Dr. Kyle Kingsley, who testified that Mr. Pella had a vendetta against the company due to
his termination, and called into question Mr. Pella’s motives for contacting the authorities in
Minnesota. Dr. Kinglsey also provided rationales for why the armored vehicle was transferred to
New York, and why Vireo Health would not suffer severe financial consequences due to a supply
shortage in New York.
15.

Defendants also e-filed Judge Leidig’s written order, dated May 4, 2018, where

Judge Leidig found the testimony of Dr. Kinglsey to be credible. Judge Leidig did not find any
statements made by Mr. Pella to the Minnesota investigators to be reliable hearsay. Judge Leidig
cites to the transcript from March 7, 2018 in making this determination, but that transcript was not
provided to this Court.
CONCLUSIONS OF LAW

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 1.

The Supreme Court of Minnesota has said that “[a] search warrant is void, and the

fruits of the search must be excluded, if the application includes intentional or reckless
misreprenstations of fact material to the findings of probable cause.” State v. Moore, 438 N.W.2d
101, 105 (Minn. 1989) (discussing and applying the two-prong test developed in Franks v.
Delaware, 438 U.S. 154, 171-172, 98 S.Ct. 2674, 57 L.Ed.2d 667 (1978), and State v. Causey, 257
N.W.2d 288, 291-92 (Minn. 1977)).
2.

When a defendant seeks to invalidate a warrant, the two-prong Franks test requires

a defendant to make a preliminary showing that (1) the affiant “deliberately made a statement that
was false or in reckless disregard of the truth,” and (2) “the statement was material to the probable
cause determination.” State v. McDonough, 631 N.W.2d 373, 390 (Minn. 2001). A
misrepresentation or omission is material if, when the misrepresentation is set aside or the omission
is supplied, probable cause to issue the warrant no longer exists. State v. Mems, 708 N.W.2d 526,
532 (Minn. 2006); State v. Doyle, 336 N.W.2d 247, 252 (Minn. 1983).
3.

Defendant Owens, who is joined in his motion by Defendant Bultman, move the

Court to grant a Franks hearing pursuant to Franks v. Delaware, 438 U.S. 154 (1978), to crossexamine Special Agent Jacob J. May, the affiant in the search warrant, to establish whether he
intentionally or with reckless disregard included material misrepresentations or omissions in the
search warrant affidavits when they were presented to the signing judges. Defendant Owens argues
that he has met the preliminary showing required to secure a Franks hearing. Defendant relies on
the credibility determination made by the Honorable Judge John J. Leidig, an Administrative Law
Judge in the State of Maryland. On March 7 and 9 2018, Judge Leidig presided over an
administrative law hearing regarding Vireo Health’s licensure in the State of Maryland. The State
of Maryland was attempting to revoke Vireo’s license based upon SA May’s search warrant
affidavit and the subsequent charges filed against Defendant’s Owens and Bultman in Minnesota.
4.

At the hearing, testimony was heard from Vireo’s CEO Dr. Kyle E. Kingsley,

whose testimony called into question the motives of Daniel Pella, MMS’s former Chief Scientific
Officer who provided the primary evidence that Defendant’s Bultman and Owens had violated
Minnesota law. Dr. Kingley testified that Mr. Pella had a vendetta against the company due to his
termination, that he vandalized key company equipment (a High Performance Liquid
Chromatography machine) and that Mr. Pella made statements that he would destroy the company.
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 Dr. Kingsley’s testimony called into question several other allegations made by Mr. Pella that were
incorporated into SA May’s affidavit. Specifically, Dr. Kingsley’s testimony called into question
that the New York branch of Vireo was suffering from a supply shortfall of any cannabis products
or strains, or that the New York facility would suffer any adverse consequences due to a supply
shortfall, that the armored car was used to divert THC oil, that the outbound transfer records were
evidence of a diversion, and Dr. Kinglsey’s testimony called into question the rationale behind the
transfer of the armored vehicle from Minnesota to New York. Dr. Kingley stated that the company
anticipated that the vehicle would be transferred to New York and stated that the vehicle was
referenced in a New York application months before it was driven to New York.
5.

Judge Leidig, in his written order following the hearing, concluded that he “did not

find any of the statements that Pella made to the Minnesota investigators to be reliable hearsay.”
(Transcript pg. 20). It is the testimony of Dr. Kingsley and the credibility determination of the
Honorable Judge Leidig that Defendant Owens claims satisfies his preliminary showing that the
affiant SA May made a reckless misrepresentation of fact or an omission that is material to the
finding of probable cause.
6.

This Court, however, disagrees that Defendant Owens has satisfied his burden for

a Franks hearing. Defendant argues that SA May did not provide additional facts as to the
circumstances of Mr. Pella’s termination or that SA May failed to conduct a proper investigation
into the circumstances of Mr. Pella’s termination, which resulted in the signing judge not having
the appropriate information to make a credibility determination for purposes of probable cause.
This argument ignores the standard of the reckless disregard for truth. As the Minnesota Supreme
Court has stated, “the standard for ‘reckless disregard for truth’ is a subjective one; ‘reckless
disregard’ does not mean ‘recklessness’ in the ordinary sense of extreme negligence . . . [i]nstead,
‘reckless disregard’ requires that a defendant make a statement while subjectively believing that
the statement is probably false.” Chafoulias v. Peterson, 668 N.W.2d 642, 654-55 (Minn. 2003).
Nowhere in Dr. Kingsley’s testimony, nor in Judge Leidig’s analysis, is it claimed that SA May
knew or should have known what he wrote in his affidavit was probably false. Mr. Pella may have
made false statements, but his false statements, if any, are not the false statements or omissions in
question when determining if a defendant has met his burden for a Franks hearing. It is the false
statements or omissions of the affiant that are in view. Defendant Owens arguments as to the
appropriateness of SA May’s investigation go the question of negligence. Negligence, if it
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 occurred, is not a basis for a Franks hearing. As Minnesota Courts have long held, an innocent or
negligent misrepresentations will not invalidate a warrant. State v. Causey, 257 N.W.2d 288, 292
(Minn. 1977). The reliability or lack thereof of Mr. Pella’s statements will not turn the affiant’s
sworn statements in the affidavit into a reckless misrepresentation unless a preliminary showing
can be made that SA May likely knew his statements were false, and yet made them anyway.
7.

Importantly, Dr. Kingsley’s testimony is not entirely clear what he told law

enforcement about Mr. Pella when they were interviewed. Below in an excerpt from the transcript
provided to the Court from the March 8, 2018 hearing before Judge Leidig:
Q: and despite notifying the Minnesota police that Mr. Pella was a disgruntled
employee who had violent tendencies, going so far as [inaudible] and that there was
an innocent explanation for this armored car being transported from Minnesota to
New York and other information, they went on to charge Dr. Bultman and Mr.
Owens who were on your executive leadership team with criminal offenses?
A. I see none of the information that I presented here today outlined in any of the
statements from law enforcement.
Q. But it was provided to them?
A. Some of it was, yes.
Q. Well, the, the things that you had talked about here today, Mr. Pella being a
disgruntled occasionally violent, incompetent individual who had a bone to pick
with Vireo Health or Minnesota Medical Solutions and a purely innocent reason for
the vehicle being driven across county by the medical director of Minnesota
Medical Solutions. You told them those things you had shared with us today?
A. I did not tell them to that specificity in my recollection. I don’t remember exactly
what was told to them and what was not, but conceptually there were pieces of,
[inaudible] given today that law enforcement was aware of.
Q. Consistent with what you’ve said today is what you told the law enforcement
officials?
A. Completely consistent as far as every aspect of what I expressed today. Not that
we weren’t aware of some of these things.
Q. But largely consistent?
A. That which was disclosed was consistent, I don’t recall exactly what was
disclosed to the law enforcement there versus today.
8.

Dr. Kingsley does not say, without equivocation that the information he testified about
regarding Mr. Pella was told to law enforcement in a like manner. There is nothing in the record
that leads this Court to believe that SA May made a statement in the affidavit with reckless
disregard of the truth or failed to make a statement with reckless disregard of the truth. It is
possible SA May was negligent in his investigation of Mr. Pella, however, a negligent
misrepresentation or omission will not invalidate a warrant. State v. Causey, 257 N.W.2d 288,

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 292 (Minn. 1977). As was the case in State v. Moore, the record here indicates that any material
omission or statement was the result of negligence on the part of the affiant rather than
recklessness or an intent to deceive the magistrate. 438 N.W.2d 101, 105 (Minn. 1989) (holding
that even if an affidavit in support of a search warrant contained a material misrepresentation,
there is no ground for invalidating the search warrant where the record indicates that the
misrepresentation was not intentional, but was negligently made). Therefore, because this
Court has found that the Defendant has failed to make a substantial preliminary showing that
a false statement knowingly and intentionally, or with the reckless disregard for the truth, was
included by the affiant in the search warrant affidavit, the Court will not order a Franks hearing
to be held.
9.

Regarding Defendant’s motion to suppress and motion to dismiss, this Court denies those
motions for the following reasons. First, the Court does not find Judge Leidig’s decision
regarding the reliability of Mr. Pella’s statements to be persuasive. Importantly, this Court does
not have the portion of the transcript that Judge Leidig cites to in making his determination.
Clearly Judge Leidig relied on more than Kr. Kingsley’s testimony in making his determination
regarding Mr. Pella’s statements. Without that transcript, it is impossible to fully analyze Judge
Leidig’s decision. Second, this Court does not find Dr. Kingsley’s testimony regarding Mr.
Pella to be persuasive. The question before this Court is not whether Mr. Pella had motives for
coming forward, or even if he told the whole truth, but whether or not SA May made a
statement in his affidavit that was a reckless misrepresentation. In that regard, Dr. Kingsley’s
testimony was unclear as to what he told Minnesota investigators about Mr. Pella. Defendant’s
motion to dismiss and motion to suppress are solely based on the transcript of the testimony
provided to the Court and Judge Leidig’s credibility determinations regarding Mr. Pella and
Dr. Kingsley. Because the Court does not find Judge Leidig’s decision to be persuasive, nor
does the Court find Dr. Kingsley’s testimony to be persuasive, this Court denies Defendant’s
motion to suppress and motion to dismiss. Assuming, arguendo, that this Court did find Judge
Leidig’s determination that none of Mr. Pella’s statements were reliable hearsay, this Court
believes there are other material statements in the affidavit that sustain probable cause.
According to the affiant, Defendant Bultman provided a transfer list to the Minnesota
Department of Health that differed from a transfer list provided by MMS’ Lead Pharmacist.
Even if all of Mr. Pella’s testimony is unreliable hearsay, this does not negate the statements
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 in the affidavit regarding the discrepancy of the transfer lists. For all the preceding reasons,
this Court denies Defendant’s motions to suppress and motion to dismiss.
Joinder
10.

The State of Minnesota brings a motion for pre-trial joinder of the parties. Pretrial joinder
is governed by Minn. R. Crim. P. 17.03 subd. 2(1), which states that when two or more
defendants are charged with the same offense, they may be tried separately or jointly at the
court’s discretion. Id. To determine whether to order joinder or separate trials, the court must
consider the following:
1. The nature of the offense charged;
2. The impact of the victim;
3. The potential prejudice to the defendant; and
4. The interests of justice.

11.

Joinder is neither favored nor disfavored by Minnesota law. State v. Johnson, 811 N.W.2d
136, 142 (Minn. App. 2012).

Nature of the Offense Charge
12.

When the overwhelming majority of evidence is admissible against both defendants, and
there will be substantial evidence presented to show both defendants worked in close concert
with one another, the nature of the offense charged favors joinder. Johnson, 811 N.W.2d at
142 (citing State v. Martin, 733 N.W.2d 88, 99-100 (Minn. 2009)). Defendant’s Bultman and
Owens are charged with the same crimes and Defendants are alleged to have worked in close
concert with one another. Plaintiff argues that all of the evidence is admissible against both
Defendants. Defendants, in the memorandum opposing joinder, do not make an argument
against the first factor, instead arguing that the first and second factors should be considered
together. This argument will be addressed below. The Court finds that the first factor favors
joinder.

The Impact on the Victim
13.

The second factor the Court must consider is supposed to weigh the impact on both the
victim of the crime as well as the trauma to the eyewitnesses who would be compelled to testify
at multiple trials. See, State v. Powers, 654 N.W.2d 667, 675 (Minn. 2003). Defendants argue
that Plaintiff has not identified a victim and appears to argue that the lack of an identified
victim leads to the conclusion that this case does not reflect the ordinary joinder rule.
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 Defendants appear to argue that in the very least, this favor should not favor joinder. The State
of Minnesota simply states that this factor does not apply. The Court agrees. This factor does
not favor or disfavor joinder. However, simply because one factor does not apply to the instant
case does not mean the pre-trial joinder rule does not apply. At oral arguments, Defendants
appeared to argue that if a victim could not be identified, the joinder rule should not apply.
Defendants cite no case law that indicates use of the pre-trial joinder rule is inappropriate when
a victim cannot be identified. The Court finds that this factor neither favors nor disfavors
joinder.
Potential Prejudice to Defendant
14.

“Joinder is not appropriate when there would be substantial prejudice to a defendant, which
can be shown by demonstrating that codefendants presented ‘antagonistic defenses’” Johnson,
811 N.W.2d at 143. Antagonistic defenses are inconsistent defenses that force the jury to
choose between defense theories advocated by the defendants. Id. This third factor is key to
the Defendants arguments against joinder. The State of Minnesota argues that up to this point,
both Defendants have adopted the motions and objections of the other, and therefore a jury
would not be forced to pick between different defense theories between Defendants.
Defendants admit that up to this point they have adopted the motions and objections of the
other, however, the dispute the claim that they will not have antagonistic defenses at trial.
Defendants claim that it is likely that the Defendants will blame each other at trial. Likewise,
Defendant Bultman argues that Defendant Owens made statements in his BCA interview that
are admissible in his separate case, but would not be admissible against Dr. Bultman because
it would violate his Sixth Amendment right to confront the statement of a codefendant. In
Bruton v. United States, 391 U.S. 123, 135-37 (1968), the Supreme Court held that when “tow
defendants are tried jointly, the pretrial confession of one, which implicates the other defendant
cannot be admitted against the other defendant unless the codefendant testifies at trial.
Admitting such a confession when the codefendant does not testify is a violation of other
defendant’s confrontation rights.” State v. Blanche, 696 N.W.2d 351, 367 (Minn. 2005). The
Court agrees with Defendant Bultman’s analysis. While Defendants have, up to this point, not
introduced antagonistic defenses, Defendant Bultman has identified specific statements that
would potentially violate Bruton, unlike in State v. Blanche, where defendant Blanche had
failed to identify statements that might be admitted that would violate Bruton. Id. at 371.
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 Because Defendant Bultman can identify a statement that likely violates Bruton, this factor
highly disfavors joinder.
The Interests of Justice
15.

The State of Minnesota argues that given the testimonial, documentary, and media
evidence, as well as the number of witnesses, a trial in this matter will be lengthy. The State
claims that separate trials would involve the same volume of evidence and testimony. The State
cites Johnson where that court said “the length of separate trials is a legitimate factor in
deciding to join cases.” Johnson, 733 N.W.2d at 119. The State argues that saving substantial
time and resources is in the interest of justice. The analysis of this factor mirrors the analysis
of factor three. If the introduction of a statement by Defendant Owens would violate Bruton,
then it cannot be in the interest of justice to join the Defendant’s for one trial. Defendants
Bultman and Owens are entitled to a fair trial where they may full exercise their Sixth
Amendment rights. Therefore, having analyzed the four factors, this Court finds that one factor
weighs in favor of joinder, two factor weigh in disfavor of joinder, and one factor does not
apply. Consequently, this Court finds that joinder is inappropriate for the case at hand.

Based on the foregoing Findings of Fact and Conclusions of Law, the Court makes the following:
ORDER
1. The Defendant’s motion for a Franks hearing is DENIED.
2. The Defendant’s motion to suppress is DENIED.
3. The Defendant’s motion to dismiss is DENIED.
4. The Plaintiff’s motion for joinder is DENIED.
5. A copy of this order shall be served upon the parties by U.S. Mail and shall constitute due
and proper service in lieu of personal service.

Davis, Michele (Judge)
2018.09.18 15:16:49
-05'00'
___________________________________

Dated: ___________________

The Honorable Michele A. Davis
Judge of District Court

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