New York Regulators Shut Down a Marijuana Processor After She Criticized the State’s Lax Enforcement
New York’s botched attempt to roll out an adult recreational marijuana market is facing even more scrutiny amid claims of whistleblower retaliation, favoritism, and the unchecked spread of illegal dispensaries.
The chief equity officer for New York’s Office of Cannabis Management (OCM) was put on administrative leave last week, and Gov. Kathy Hochul has ordered an overhaul of the beleaguered program, which even she has admitted is a “disaster.”
At the center of the story is Jenny Argie, CEO of Jenny’s Baked at Home Company, a New York marijuana processor. Argie says the OCM retaliated against her after she leaked a recorded conversation with Damian Fagon, the OCM chief equity officer. In the recording, Fagon admitted that the agency wasn’t enforcing rules against unlicensed pot dispensaries and brands that were importing untracked, untested marijuana from other states.
“They got power-drunk and forgot that these are real people’s lives with promises they had made to them,” Argie tells Reason. “And the more we spoke up, the more they closed the door on us.”
New York gave the green light to recreational marijuana in 2021, and Argie was one of the first licensed cannabis processors. She invested significant money and took out a second mortgage on her house, hoping to establish herself early in the new industry.
But a two-year-long delay in the rollout of the legal marijuana industry, continuing long waits for licenses, and dubiously sourced pot saturating the market has all but crushed many small operators like Argie. There are over 2,000 illegal marijuana dispensaries in New York City alone and only about 85 licensed ones statewide. New York marijuana growers simply don’t have enough legitimate dispensaries to sell to.Â
“For anybody who’s trying to enter a market as a small business, cash flow is king,” Argie says. “We’ve already spent two years dying on the vine, waiting for the market to open up, which they told us was going to open but kept putting it off and putting it off.”
Processors like Argie also quickly discovered that they were being boxed out of the limited market by large out-of-state companies offering dispensaries sweetheart payment terms and consignment deals that were supposed to be against the law.
Argie began speaking out about the problems facing New York marijuana growers and processors like herself. She wrote op-eds in local newspapers and testified before the New York state Legislature in October.
Her public comments led to a phone call that month with Fagon. When Argie confronted Fagon over the fact that she knew companies and dispensaries were illegally sourcing marijuana and breaking regulations, Fagon said the OCM would “probably” start cracking down on them in early 2024.
“We’re not going to start a full-fledged cra
Article from Reason.com
The Reason Magazine website is a go-to destination for libertarians seeking cogent analysis, investigative reporting, and thought-provoking commentary. Championing the principles of individual freedom, limited government, and free markets, the site offers a diverse range of articles, videos, and podcasts that challenge conventional wisdom and advocate for libertarian solutions. Whether you’re interested in politics, culture, or technology, Reason provides a unique lens that prioritizes liberty and rational discourse. It’s an essential resource for those who value critical thinking and nuanced debate in the pursuit of a freer society.