Jenny Argie Sues New York's Office of Cannabis Management Over Alleged Retaliation and 'Selective Enforcement'
Person at center of NY Office of Cannabis Management enforcement sues state agency.
The subject of the state’s first public recall of a cannabis product – who recently made allegations of retaliation and “selective enforcement” against the Office of Cannabis Management – sued the state agency on Wednesday.
Jenny Argie, one of New York’s first licensed cannabis processors, is seeking immediate relief and an injunction in Albany Supreme Court after the OCM pulled her products from shelves and issued a stop-work order at her Hudson Valley facility after finding she used an unauthorized method to make her products.
Argie claims the OCM acted in “retaliatory, arbitrary and capricious” ways, and said her company will go out of business by the end of March if the stop-work order and quarantine on her products are not lifted, according to documents shared with NY Cannabis Insider.
Her attorney, Dean DiPilato, said the OCM retaliated against Argie due to her “vocalizing concerns that impact all New York consumers of adult-use cannabis products.” Argie had previously spoken publicly about New York regulators’ lax approach to rulebreakers in this publication and at a state Senate subcommittee hearing in October.
In civil cases, temporary restraining orders are typically short-term injunctions, granted until the arguments of the case can be heard. They are generally reserved for when a punishment or action jeopardizes a company’s ability to survive until a court date can be set to hear arguments.
“This was never my intention, I’m not a lawsuit kind of person … but I don’t see any other way to make them stop retaliating against people,” said Argie on Thursday.
“I’m completely seized; no cash flow or anything,” she said.
The OCM declined to comment, as is customary for the office regarding pending litigation.
The state agency currently faces multiple lawsuits on both a state and federal level, and Gov. Kathy Hochul recently hinted at a change in leadership when referring to the state’s rollout of the recreational market as a “disaster.”
In a story published on Tuesday, NY Cannabis Insider chronicled Argie’s situation and found it wasn’t unique: over a dozen sources also claimed that the OCM had practiced retaliatory behavior or used fear tactics to prod industry stakeholders to stay quiet or not speak up about problems they saw in the marketplace.
Following that story, Tess Interlicchia, a cannabis cultivator at Grateful Valley Farm and member of the Cannabis Farmers Alliance, shared a survey that showed nearly 80% of all licensed cultivators in the state feel that the OCM and Cannabis Control Board should be audited by a third party.
Over one-third of the respondents also said they wouldn’t reach out to the authorities regarding harm done to them out of fear of repercussions.
A recap of what happened
The OCM issued the state’s first recall in December after one of Argie’s products fell 1 milligram below the advertised THC level. In paperwork, Argie claims the recall was retaliation for leaking audio from a conversation with OCM Chief Equity Officer Damian Fagon.
The contents of that conversation were published in November.
After running the story, Fagon called a NY Cannabis Insider reporter, yelling, cussing and singling out Jenny by name.
“I know it was Jenny,” Fagon said at the time.
The lawsuit also points to the context surrounding the recall, arguing that the state had many products on shelves that did not meet testing standards – including top-selling brands – that suffered no enforcement.
Those violations were documented by NY Cannabis Insider in a separate investigation.
“If I enforce regulations on licensed operators, I would have to close down half of them,” Fagon said during the call with Argie.
Worried about her reputation, Argie told NY Cannabis Insider in February that she wished to go on the record as the source of the leaked audio.
“It’s tough because I am scared –– but I am more scared not to have integrity and speak my mind,” Argie said at the time. “I am fully aware that after this article comes out I stand to be raided; for more scrutiny to be placed on my product.”
Shortly after NY Cannabis Insider reached out to the OCM requesting a comment, the office issued a surprise inspection at Argie’s facility, quarantining all of her products and issuing a full stop-work order.
The order revolved around Argie’s use of a solvent, or chemical, used to extract THC and other cannabinoids from dried flower. The chemical, R134a, is used in a handful of states, including at a processor in New Jersey – but it’s not approved for use in New York.
In addition to requesting the stop-work order and quarantine be lifted, Argie is asking the court to approve R134a as a solvent for the state’s nascent cannabis market.
The OCM denied Argie’s corrective action plan on Monday, saying she needed to submit additional scientific documentation about the product’s safety before the enforcement action could be lifted.
This despite OCM-issued guidance that holds processors like Argie responsible for deciding whether their products pose a public health risk.
“It is the responsibility of the licensee to consider … any risks to the health of consumers,” reads the agency’s testing guidance.
Additionally, the OCM’s recall of Argie’s products in December concerned a packaging and labeling violation – yet her packaging listed R134a at that time. This raises questions about why the issue was not previously flagged.
The lawsuit also brought forward previously unreported details:
Argie spoke in August with former OCM Chief of Staff and Senior Policy Director Axel Bernabe to provide information regarding large brands skirting regulations, according to the filing.
She also submitted evidence, including photographs and descriptions, to OCM Executive Director Chris Alexander in September of a product purchased at a legal New York dispensary that had California stickers on the label, according to court documents.
Transporting cannabis across state lines is a federal offense.
