New York is currently investigating California-based cannabis giant Stiiizy for allegedly smuggling marijuana from out of state into its licensed stores. This investigation was reported by The New York Times, which cited two unnamed sources. The state’s Office of Cannabis Management (OCM) is looking into Stiiizy along with several other companies for potentially “laundering” products into New York via a state-licensed processor.
On Monday, OCM inspectors conducted a surprise audit at Omnium Canna, a processor based in Long Island, as part of the investigation. The Times also noted that the OCM is investigating several other companies, including Grön, Mfused, To the Moon, Turn, and Waahoo, which is Omnium Canna’s house brand. None of the companies involved immediately responded to requests for comments regarding the allegations.
Stiiizy’s CEO, James Kim, denied the inversion allegations, stating in an email to MJBizDaily that the OCM’s audit found Omnium Canna’s operations to be compliant with New York laws and regulations. However, the OCM did not respond to Kim’s claims at the time of the report.
A spokesperson for Grön also communicated to MJBizDaily that the Times’ report was inaccurate and clarified that the Oregon-based company is not under investigation. The term “inversion” refers to the practice of inserting marijuana products produced outside regulated channels into the licensed supply chain, and concerns about this issue have been circulating within industry circles for some time.
Stiiizy is one of the most recognized brands linked to inversion allegations, and OCM officials have acknowledged that this practice is occurring to some extent in New York. In February, the agency established a Trade Practices Bureau specifically to investigate regulatory violations, including inversion. Stiiizy’s products have reportedly been found on store shelves in New York, including at unlicensed outlets that emerged after the state legalized adult-use marijuana in March 2021.
If confirmed, these allegations would add to the challenges faced by Stiiizy, which has previously been accused in lawsuits of illegal business practices, marketing its vaporizer oil cartridges to youth, and selling hemp-based products with excessive THC levels.
