New York Regulators Target Weed Brands Accused of Breaking Rules

New York Times

07-04-2025

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.
The state inquiry 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 investigation.
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 some companies have long been suspected of cutting costs by sourcing weed from states where it is cheaper or by buying from unlicensed growers.
The strategy, known as 'inversion,' undercuts promises that legalization offers consumers a safe supply of cannabis products that can be traced back to local farms. Instead, New York consumers may have been sold products that have not been as rigorously tested for safety, while licensed growers have been left with a glut of weed that they can't sell in the state's billion-dollar market.
The investigation signals a shift in priorities for the Office of Cannabis Management, which has long been accused by license holders, particularly growers, of ignoring misconduct as regulators focused on setting up the recreational market. The state inquiry is likely to reverberate across an industry in which cheating is believed to have gone largely unchecked.
It is unclear how widespread inversion is in New York. But law enforcement authorities frequently intercept shipments of weed destined for New York.
Stiiizy, a Los Angeles-based company whose name comes from a portmanteau of 'style' and 'ease,' officially launched in New York in February. But it has been a mainstay of the illicit market for years. Its products are packaged in factories on Long Island that are hubs for other popular brands like Grön, which is also under investigation.
The brands — along with To the Moon, Turn and Waahoo — could be permanently banned from New York. And they may face more scrutiny in other states where they are sold. Waahoo is Omnium's house brand.
State regulators and the cannabis companies did not immediately respond to a request for comment.
This is a developing story and will be updated.