Favoritism, backdoor deals, arbitrary actions, selective enforcement, and officials punch-drunk with power are how Jenny Argie describes New York State cannabis regulators’ handling of the Office of Cannabis Management (OCM).
Argie’s company, Jenny’s, offers a line of cured resin vapes and sugar-free, vegan, and kosher edibles. She is one of a few licensed women manufacturers of cannabis-based products in New York and part of the first crop of licensed operators to launch the industry.
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Her journey into cannabis began unexpectedly following a diagnosis of breast cancer when she chanced upon compelling research highlighting the potential synergy between cannabis compounds and cancer cells. Motivated by a newfound curiosity for the science behind cannabis and buoyed by New York’s recent legalization, she recognized a rare chance to venture into a nascent industry she cared deeply about. It was an opportunity she couldn’t resist.
Trusting in her 15 years of experience as the owner and operator of a successful children’s furniture company, Argie took the leap of faith and leveraged a second mortgage on her home to fund her CBD hemp manufacturing business in 2018 when the Farm Bill passed. She chose Stuyvesant, NY, an economically depressed town, to bring sorely needed jobs and revenue to the area with her Jenny’s Baked factory and operations.
Frustrations lead to alleged retaliation
Early investors in the cannabis industry, like Argie, paved the way by building the cultivation and manufacturing infrastructures to get the industry up and running and operational. It would be a long game, but the NY lawmakers claimed to favor small businesses and farmers and even promised them a head start in the adult-use marketplace by preventing large corporations and well-established brands from out of state from having immediate entry into the market.
Fast forward a few years, and those assurances have crumbled. The anticipated rollout has faltered, leaving the market vulnerable to an influx of illicit products from well-established out-of-state entities. Adding to the challenge is the proliferation of over 8,000 illegal storefronts across New York State, peddling unregulated and potentially hazardous counterfeit goods. This onslaught has rendered competition virtually insurmountable for legitimate operators.
Argie channeled her frustration into a hard-hitting article for Syracuse.com, blasting the OCM for its mishandling of license distribution. She argued that the OCM’s mismanagement creates an uneven playing field and disrupts economies of scale. Argie specifically criticized the OCM’s failure to uphold its promise of prioritizing minority, justice-served, and veteran-owned businesses for first access to the market.
“There’s a lot of us fighting to stay alive out here, and this isn’t what the OCM promised us,” Argie said via phone.
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The OCM’s Chief Equity Officer, Damian Fagan, requested a call with Argie to discuss the allegations in her article. Argie’s eroding trust in the office and its intentions prompted her to record the conversation, during which Damian allegedly acknowledged awareness of illicit activities but refused to take action. He asserted that the OCM operated according to its own protocols and urged her to stop instigating public scrutiny.
In the aftermath of Argie’s conversation with Damian, the OCM issued a recall on one of her gummy products, citing a discrepancy of one milligram less of THC per gummy than indicated on the packaging. However, media outlets sensationalized the recall, attributing it to a lack of required testing for consumer safety and product quality, potentially tarnishing Argie’s brand reputation. Despite possessing a certificate of authority (COA) from a certified lab verifying the product’s safety, Argie promptly rectified the labeling discrepancy in subsequent batches.
“Selective enforcement”
The stalled rollout of NY’s cannabis industry is no secret; news headlines of chaos and lack of enforcement for rules and regulations at the OCM have been splattered across the media outlets. Months of turmoil prompted State Senator Jeremy Cooney to convene a hearing alongside fellow senators to scrutinize the situation.
Once more, Argie emerged as a staunch advocate for accountability within the cannabis sector, joining others demanding adherence to legal frameworks. Testifying before the panel, she underscored the dire plight faced by embattled small business owners, highlighting how the botched rollout imperiled their livelihoods and hard-earned savings.
The hearing left license holders clinging to hope that government officials, notably the Governor, would intervene to restore order to the beleaguered rollout. However, their aspirations were swiftly dashed as the OCM moved ahead with initiatives to integrate well-funded corporate entities and out-of-state brands into the market.
At this point, Argie decided to unveil her recorded conversation with Damian Fagan. In the exchange, Fagan allegedly admitted to turning a blind eye to rampant illegal activity within the industry to avoid disrupting its supply and demand dynamics. Faced with a mounting sense of injustice, Argie felt compelled to shed light on the conversation, recognizing that the OCM was unwilling to address the critical issues plaguing small business owners.
Journalist Wes Parnell was the first to break the story of the leaked audio, exposing the OCM’s pattern of so-called “selective enforcement” and the fear among license holders who dare not speak out against the agency for fear of retaliation, similar to Argie’s recall. Within weeks of the article’s publication, her business was shuttered by the OCM on the grounds of unapproved usage of a specific solvent she uses in her manufacturing process. She had to lay off her staff due to the absence of cash flow into her business.
“I criticized the OCM for not enforcing regulations, and I’m paying the price,” Argie lamented. “The regulations are supposed to help people like me get to market and have an even playing field.”
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An article in Syracuse.com about Argie’s situation quoted OCM Executive Director Chris Alexander in a statement saying, “Inspections and recalls are part of the everyday work required to ensure our cannabis industry is producing safer, tested products. We are proud of the diligent work our compliance team performs day in and day out to uphold State standards.”
Is Jenny Argie’s case a casualty of retaliation, or is the OCM justified in its actions? That answer is still up for debate. Regardless, Argie remains resolute, pressing forward with unwavering determination to get her operations running again. As she navigates the arduous bureaucratic maze imposed by the OCM to reopen her business, fulfilling many demands, such as obtaining a specific environmental test for her solvent base, Argie hopes she will soon return to business as usual—if there is such a thing at this point in New York’s cannabis market.
This article was submitted by a guest contributor to GreenState. The author is solely responsible for the content.