New York marijuana chief resigns as inversion investigation fails

New York’s top cannabis official abruptly resigned Monday amid the collapse of a major state investigation into alleged marijuana inversion involving millions of dollars’ worth of product.

Felicia Reid, who’d led the Office of Cannabis Management since June 2024, resigned at New York Gov. Kathy Hochul’s request, according to The Capitol Pressroom.

Hochul asked for Reid and the head of a new investigative arm to step down amid the unraveling of a case OCM brought against a licensed processor.

Omnium Health allegedly smuggled illicit product into the state’s $1.8 billion market in a case that also touched major national brands.

New York cannabis shakeup as inversion investigation fails

Reid is now the second New York cannabis czar to be forced out under Hochul.

Her resignation accompanied the dismissal of a case OCM brought against Omnium Health, a Long Island distributor alleged to be at the heart of a scheme to smuggle illicit product into the state.

Also asked to leave the agency was James Rogers, who directed OCM’s new Trade Practices Bureau, tasked with stamping out inversion.

Reid and Rogers will exit by the end of the week.

OCM did not immediately comment.

In a statement to The Capitol Pressroom, Hochul tied the shakeup to the Omnium case.

“Too often, the Office of Cannabis Management has stood in the way of the market realizing its potential, including most recently in the case of a pending compliance action that it has had to withdraw,” Hochul said, according to the Capitol Pressroom.

Major marijuana inversion allegations abandoned

The shakeup comes as OCM withdrew its case against Omnium, which risked the heaviest penalties yet assessed against a licensed marijuana business in the state.

According to OCM’s since-dropped allegations, Omnium allowed major out-of-state brands to “rent” its permit, through which product grown outside of legal channels ended up on New York marijuana store shelves.

OCM’s Trade Practices Bureau started investigating Omnium in February.

According to OCM, investigators discovered THC isolate at Omnium’s facilities that had no evidence it produced within the state’s regulated system.

OCM had sought serious punishment including:

• Revocation of Omnium’s processor and distributor permits.
• “Debarment” that would prevent its principals from applying for future permits.
• An unspecified fine “related to the projected revenue” stemming from the inversion scheme.
• A potentially massive recall “of all products made by unlicensed processors” and the products’ destruction.

Second New York marijuana czar to depart amid controversy

Reid, who served as acting director, is the second New York cannabis czar – and the second to be forced out amid controversy.

Reid’s predecessor, Chris Alexander, resigned in May 2024 in the wake of a scathing audit conducted by Hochul’s office after the governor branded the launch of adult-use marijuana sales a “disaster.”