The New York Office of Cannabis Management (OCM) is investigating several large cannabis brands for potential inversion of out-of-state cannabis products into New York’s regulated cannabis market, the New York Times reports. Cannabis inversion is when unapproved products get diverted into a state’s adult-use market, circumventing local cannabis licensing and quality control rules.
The Times cited unnamed sources claiming at least six cannabis brands are being investigated for inversion, including large multistate operators like Stiiizy, Grön, and Mfused.
OCM officials on Monday conducted surprise audits of Omnium Canna as part of its investigation launched in February, the report said, into whether the licensed cannabis processor might be manufacturing cannabis products using out-of-state cannabis. If Omnium — which manufactures products for the brands listed in the report — is found to have improperly obtained its source material, the company’s license could be forfeit.
Stiiizy CEO James Kim said in the report, “At no point have we sourced cannabis from out of state or engaged in practices that violate New York’s cannabis regulations.”
Grön spokesperson Drew Tybus said the Oregon-based edibles company is not being investigated. “We are not under investigation in any state in which we operate or where our products are manufactured and sold, and refute any claims or references to the contrary,” he said.
Mfused, another popular multistate cannabis brand named in the report, did not provide a comment for the Times but later told MJBizDaily that the allegations were untrue and that the company is not under investigation.
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