Key state official to become CEO of medical cannabis company

Updated: 5:01 p.m. | Posted: 10:40 a.m.

A Minnesota health official instrumental in getting the state's medical marijuana program off the ground is leaving to become chief executive of one of the two marijuana producers in the state.

Manny Munson-Regala, assistant commissioner of the Minnesota Department of Health and overseer of the state Office of Medical Cannabis, is switching roles in the business, from regulator to regulated, as he moves to Cottage Grove-based LeafLine Labs.

"He was not actively seeking this position and our recruitment of him did not start until June 3, 2015 — just eight short days ago," said Dr. Andrew Bachman, an emergency medicing physician and LeafLine co-founder, in a company statement.

Munson-Regala said his new job "gives me the chance of ensuring Minnesota's medical cannabis industry is developed the right way, grounded in science and compassion."

The company wouldn't disclose his salary.

Minnesota Department of Health spokesperson Michael Schommer said the agency was notified Wednesday. "Munson-Regala was immediately recused from his responsibilities related to the medical cannabis program," Schommer said in an email. "From what we've been able to determine, no policy or operational decisions were made in the last week. Rollout of the state's medical cannabis program will continue as scheduled."

The Office of Medical Cannabis was responsible for day-to-day operation of the program but its director was beneath Munson-Regala in the agency's hierarchy.

Schommer's email noted that Michelle Larson, the director of the Office of Medical Cannabis, will continue to provide day-to-day management of the office and the program, as she has since her hire last year. The long-term succession for the assistant commissioner position will be determined in the weeks ahead.

Approved patients are just a few weeks away from being able to buy cannabis from LeafLine and another approved manufacturer.

Move raises eyebrows

Munson-Regala has worked in the private sector before, including stints with UnitedHealth and Ceridian. He has been with the Health Department for nearly three years, and also helped establish the state's health insurance exchange. He has worked for the state's Department of Commerce and served as senior counsel for the St. Paul Companies and as a UnitedHealth executive.

"This is my sixth start-up," he said. "Four in the private sector, two in the public sector. I like the pace and energy of creating something from scratch. But its also really important to be the one in charge."

While he's moved between the private and public sectors before, Munson-Regala's latest move involves one of the most controversial recent state initiatives, and his exit is raising questions about the propriety of his newest job.

"He's now an executive and, I would assume, a highly paid one at that, working for a corporation that's going to be one of the few providers in the state of Minnesota," said state Sen. Warren Limmer, R-Maple Grove, who opposed the medical marijuana legalization measure passed by the Legislature last year.

"It seems all too convenient."

Critics are comparing Munson-Regala's move to that of state Sen. David Tomassoni, DFL-Chisholm, who was recently hired by an Iron Range local government board. Tomassoni later turned down the new job after complaints about potential conflicts of interest.

Critics have also compared the move to the recent promotion and pay raise given to the chair of the Metropolitan Council. Adam Duininck, who holds the job now, is married to Gov. Mark Dayton's chief of staff.

State Sen. John Marty, DFL-Roseville, said Munson-Regala's new job should give the public pause.

"I think they question whether their government is representing their interests or not," Marty said. "And, no offense to Mr. Munson-Regala, but this is clearly the type of situation that bothers people, and should bother people."

Marty said he plans to again introduce legislation aimed at former government officials moving to the private sector who then lobby on behalf of their new employer.

"I fully get the concept of conflict of interest," Munson-Regala said.

LeafLine, he added, only approached him last week about taking the job. He accepted the job two days ago, he said, and didn't take part in any state action over medical cannabis once he'd been approached by LeafLine.

Munson-Regala also said he played no direct role in selecting LeafLine as a one of the state's two cannabis providers last fall, and hasn't had a direct role in regulating the medical cannabis industry since then. The Health Department says he's been relieved of his responsibilities related to the medical cannabis program until he formally leaves the department next Thursday. He'll join LeafLine in early July.