Investigation into NY Cannabis regulator Damian Fagon still going

Investigation into NY Cannabis regulator Damian Fagon still going

New York Cannabis Equity Officer Under Investigation Amid Retaliation Allegations.

The New York Inspector General’s Office is investigating Office of Cannabis Management Chief Equity Officer Damian Fagon, who remains on administrative leave amid allegations of retaliation and selective enforcement brought to light by a NY Cannabis Insider investigation

An OCM spokesperson told NY Cannabis Insider on Tuesday that the former equity officer is still employed with the agency as they wait for the IG’s office to refer the case back to the OCM. Fagon was paid $148,000 in his role in 2023, according to The Empire Center.

It remains unclear how long the investigation will take, and what actions the OCM may take in the wake of its results, an OCM spokesperson said.

The OCM suspended Fagon in March after NY Cannabis Insider reported about Jenny Argie, a Hudson Valley processor who was the subject of the first and only public recall in the state.

The OCM issued the state’s first recall in December after one of Argie’s products fell 1 milligram below its advertised THC level. Regulators later 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.

In a lawsuit Argie filed against the agency, she alleges the OCM acted in “retaliatory, arbitrary and capricious” ways, and said her company will go out of business. Fagon went after Argie’s company, she alleges, because of comments she made about regulators’ lax approach to rulebreakers in this publication and at a state Senate subcommittee hearing in October.

Additionally, Argie said Fagon retaliated against her company because she leaked audio of the chief equity officer admitting the OCM had knowledge of large out-of-state brands openly skirting regulations or illegally importing cannabis from other states.

Since Fagon’s suspension, scrutiny of the OCM’s actions regarding Argie have only increased. Last week NY Cannabis Insider reported that the OCM quietly updated its guidance regarding the banned chemical that led to the stop-work order.

The agency changed its rules on on March 15 – the same day Argie was in court seeking relief from the shutdown – but didn’t notify business owners and laboratories about the regulatory shift until mid-May.

Fagon has apparently continued exerting influence within New York’s legal cannabis industry while he’s been under suspension, which has also raised questions among legal cannabis operators.

When NY Cannabis Insider wrote about a controversial position the Cannabis Association of New York took last month, multiple sources questioned why CANY President Damien Cornwell had mentioned being in contact with Fagon, who had already been placed on administrative leave.

The IG investigation into Fagon is being conducted amid an overhaul of the OCM. Gov. Hochul announced the shake-up – which includes OCM Executive Director Chris Alexander stepping down in September – following an inquiry by the Office of General Services into the agency.

OGS Commissioner Jeanette Moy released a report earlier this month which detailed inefficiencies, inexperience and mismanagement at the OCM, and Gov. Kathy Hochul said her most pressing goals are to speed up the pace of licensing – especially for retailers – and crack down on illicit weed shops that have proliferated statewide.

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Region: New York

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