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Damian Fagon, the embattled Chief Equity Officer at the Office of Cannabis Management, resigned on Friday following an investigation into allegations of retaliation and favoritism, which rocked the nascent cannabis space but were ultimately found unsubstantiated, according to the OCM.
Fagon, who joined the agency in June of 2022, was placed on administrative leave earlier this year following a Syracuse.com investigation and a subsequent inquiry by the Office of the Inspector General following reports of heavy-handed silencing tactics toward critics and the expedition of licenses for certain businesses.
The Inspector General report found the allegations unsubstantiated. The report was not made public but NY Cannabis Insider obtained a copy.
“I know that Mr. Fagon has done tremendous work leading OCM’s equity efforts, setting up OCM to take the most innovative and equity-driven approach to the development of New York’s cannabis industry,” said Felicia A. B. Reid, in a statement. “I am thankful to him for his time and talent. I wish him well and great success in his future endeavors.”
Fagon did not respond to a request for comment.
He will remain on administration leave until November 27 but will work in a narrow capacity assisting leadership to transition the equity portfolio, according to the agency. Fagon’s position, which paid roughly $148,000 according to Seethroughny.net, was a critical node in the leadership of an agency that built itself around equity outreach.
The former chief equity officer had, as recently as this summer, sent letters to the Cannabis Advisory Board requesting to be reinstated to his former position, but it was unclear why he chose to resign following the conclusion of the report.
Fagon had not held leadership positions in state government before assuming the role and was a controversial choice at that time, according to former staff.
Fagon came under fire earlier this year following allegations of retaliation. Multiple stakeholders in the industry claimed the official used fear tactics to silence critics while assisting and providing favoritism to others. According to the IG report, an official within the agency also lodged a complaint accusing Fagon of expediting licenses for certain businesses. Those complaints were found unsubstantiated.
Amongst other accusations, former and current staff told NY Cannabis Insider they complained that Fagon often displayed unprofessional behavior at the agency and fostered a hostile working environment.
A separate investigation into the agency by the Office of Government Services found a chaotic “start-up” like culture at the agency with little transparency. That report concluded, “it is difficult to dispel allegations or widespread insinuations of unfair treatment, retaliation, or misconduct in a process taking place within a ‘black box.’”
Fagon’s departure follows a three-month long NY Cannabis Insider investigation published in March about Jenny Argie, a Hudson Valley processor who was the subject of the first and only recall in the state.
The OCM issued the recall in December after one of Argie’s products fell 1 milligram below its advertised THC level, even though other products in the marketplace had wildly mislabeled or inflated numbers. In paperwork filed in court, Argie claims the recall was retaliation for leaking audio from a conversation with Fagon.
In the leaked audio, Fagon claimed the state had knowledge of large brands illegally importing products into the state and passing it off as grown in New York, undercutting local producers and small farmers. In the conversation, which was published in November, Fagon said the state was not enforcing against the illegal flow of cannabis.
After running that story, Fagon yelled, cursed and singled out Argie by name in a call with a NY Cannabis Insider reporter.
“I know it was Jenny,” Fagon said at the time.
Later, Argie sued the OCM to lift a stop-work-order, which was placed on her facility in March. The stop-work order came six days after NY Cannabis Insider reached out to the state agency for a comment regarding an investigation into allegations of retaliation from Argie and others, including current and former staff.
Argie’s products were subsequently quarantined and her facility was shut down for months. In court papers, Argie alleges the enforcement was a heavy-handed response to her going on the record about the December recall and leaking the contents of the phone call.
Argie is currently suing the state for damages.