New York marijuana regulators are investigating six companies suspected of participating in illegal cannabis shipments across state lines, which would violate both federal and state laws. This report comes from The New York Times, highlighting the serious nature of the allegations against these companies.
The investigation targets several brands, including California-based Stiiizy and Turn, Oregon-based Gron, Washington-based Mfused, and New York companies Waahoo and To the Moon. These brands were noted during an inspection at two licensed cannabis processing facilities on Long Island owned by Omnium Canna, which collaborates with all six companies. The investigation has reportedly been ongoing since February, and Omnium has produced 1.2 million cannabis products valued at $47 million for these businesses since October.
Representatives from Stiiizy, Gron, and Omnium denied any wrongdoing, asserting that their operations are compliant with regulations. They characterized the inspections at Omnium as routine audits. A spokesperson for Mfused also stated to MJBizDaily that the company is not under investigation. Stiiizy CEO James Kim emphasized to The Times that they have never sourced cannabis from out of state nor engaged in practices that violate New York regulations.
Despite the denials, a former state Cannabis Control Board member indicated that illegal interstate cannabis shipping is widely acknowledged in the industry. Jennifer Gilbert Jenkins remarked that, while everyone knows these practices occur, accountability is lacking. She stressed that for the Office of Cannabis Management (OCM) to instill confidence in the state’s market, they need to demonstrate active oversight.
Additionally, The Times acquired a whistleblower report containing over 2,000 pages, alleging significant discrepancies between lab testing results for cannabis products and the safety labels found on items sold in licensed dispensaries. The whistleblower claimed that these discrepancies could lead to product recalls or quarantines.
One contributing factor to these issues is New York’s slow implementation of a track-and-trace system for cannabis companies, which is standard in many other states. This system, designed to monitor inventory and prevent illegal diversions, is in progress with the development of BioTrac. Felicia Reid, the acting executive director of the Office of Cannabis Management, confirmed during a joint budget hearing in February that they are working on establishing this crucial system.
