New York State regulators are investigating some of America’s biggest cannabis companies after receiving complaints that they have been selling marijuana to New York dispensaries that comes from unauthorized sources or is grown out of state, an illegal practice that has been called the industry’s open secret.
Since February, the Office of Cannabis Management, which oversees the cultivation and sale of marijuana in New York, has been investigating whether several companies, including Stiiizy, the nation’s best-selling brand, are laundering weed through a processor on Long Island, according to two people with knowledge of the matter. Stiiizy and the other cannabis companies denied the accusation.
The investigation entered a new phase on Monday when inspectors from the agency conducted surprise audits at the factories of the processor, Omnium Canna, which makes products for the brands included in the state inquiry.
The inspectors, some wearing jackets with “compliance” written in bright blue letters on the back, visited two of Omnium’s facilities in a brick office complex that also houses a dance studio and an entertainment equipment company. They carried clipboards as they went between two entrances separated by a parking lot.
It is a federal crime to transport marijuana across state lines, so legal weed has to be grown and sold in the same state through licensed businesses. But it is widely known in the cannabis industry that some companies cut costs by sourcing weed from states where it is cheaper or by buying from unlicensed growers.
