New York regulators are reportedly scrutinizing California-based cannabis powerhouse Stiiizy amid allegations of illicitly bringing marijuana products from outside state lines into licensed dispensaries.
According to a report in The New York Times, citing unnamed sources, Stiiizy is among a group of cannabis companies currently under the microscope of the New York Office of Cannabis Management (OCM). The investigation centers on the potential “laundering” of out-of-state cannabis into the legal New York market through a state-licensed processor.
The Times detailed a surprise inspection conducted by OCM officials on Monday at Omnium Canna, a processing facility located on Long Island. The report also indicated that the OCM is investigating several other cannabis operators, including:
- Grön
- Mfused
- To the Moon
- Turn
- Waahoo (Omnium Canna’s house brand)
While none of the companies named in the Times report offered immediate comments to the publication, Stiiizy CEO James Kim issued an emailed statement to MJBizDaily, vehemently denying any involvement in “inversion.” Kim further asserted that the OCM’s audit of Omnium’s facility concluded that its operations were “compliant with New York laws and regulations.” The OCM has yet to respond to Kim’s claims.
Separately, a spokesperson for Oregon-based Grön contacted MJBizDaily via email, stating that the Times’ report contained inaccuracies and that their company is “not under investigation.”
The term “inversion” refers to the practice of introducing cannabis products originating outside of the regulated supply chain into the legal, licensed market. Whispers of such activities have circulated within the cannabis industry for some time. However, the connection of a prominent brand like Stiiizy to these allegations marks a significant development.
OCM officials have previously acknowledged the existence of inversion within New York’s cannabis market. In February, the agency established a dedicated Trade Practices Bureau to specifically address and investigate regulatory breaches, including allegations of inversion.
Stiiizy is one of several well-known cannabis companies based outside of New York whose products have appeared on the shelves of retailers within the state, including some unlicensed establishments that emerged following New York’s legalization of adult-use cannabis in March 2021. In some instances, the authenticity of these products has been unclear, leaving open the possibility of counterfeit goods or genuine products introduced into the state through unauthorized channels.
These allegations, if substantiated, would represent another challenge for Los Angeles-based Stiiizy. The company has faced previous legal action, including accusations of illegal business practices, marketing vaporizer cartridges to underage individuals, and selling hemp-derived products containing excessive levels of THC.
Source: MJ Biz Daily
Written by Midwest Dazed