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The Office of Cannabis Management has approved a chemical for cannabis extraction without notifying the processor whose facility has been shut down since March for using the solvent, and who has alleged OCM retaliated against her company for leaking a conversation she had with a top agency official.
Further, documents show the OCM changed its rules regarding the chemical on March 15 – the same day the Hudson Valley processor, Jenny Argie, was in court seeking relief from the shutdown – but didn’t notify business owners and laboratories about the regulatory shift until last week.
Argie used the chemical, R134a, to extract THC from cannabis flower despite OCM not listing the method as an approved technique (R134a is deemed safe by the FDA, European Union and in use among several states).
In March, the state regulatory body issued a surprise inspection at Argie’s facility, discovered she was using the solvent and issued a stop-work order.
Argie filed a lawsuit shortly after, alleging OCM issued the order because she leaked audio of the agency’s chief equity officer, Damian Fagon, admitting the office had knowledge of large out-of-state brands openly skirting regulations or illegally importing cannabis from other states.
Damian Fagon, Chief Equity Officer at New York State Office of Cannabis Management, speaks to reporters next to marijuana plants for the adult recreational market hanging in a drying room at a farm in Suffolk County, N.Y., Tuesday, Oct. 4, 2022. (AP Photo/Mary Altaffer)AP
Fagon was placed on administrative leave in March, and the OCM hasn’t answered any of NY Cannabis Insider’s questions about the state of his employment or the investigation into his actions.
The OCM said in court documents that the shutdown order would be lifted after the solvent was deemed safe for use, but according to Argie, there have been no updates to the company’s current freeze in operations, drawing concerns that the enforcement was targeted and heavy handed.
Neither she nor the court were notified that the state had updated its guidance during litigation, said Argie’s attorney, Dean DiPilato.
Argie, along with over a dozen other sources including former OCM staff, claimed earlier this year that the OCM retaliated and used fear tactics to keep critics quiet.
“Last year, I asked OCM for help defending New York small businesses and social equity, and was rejected,” Argie told NY Cannabis Insider in a statement.
“So I wrote articles and testified in Albany to make my concerns heard. The OCM has since tried to silence me by ruining my reputation and decimating my business. New Yorkers have lost jobs and wages, lost opportunities to sell and use beloved products. The financial and mental toll of all this is incalculable. I look forward to my day in court.”
The OCM did not respond to NY Cannabis Insider requesting comment.
Gov. Kathy Hochul released a scathing report on Friday which claimed the agency acted in ways that were opaque, inefficient and had an organization structure that could “create the appearance of conflicts of interest.”
As part of the report, Hochul announced she would shift the top leadership at the organization, replacing executive director Christopher Alexander when his contract expires in September.
A recap of what happened
Argie sparked an investigation into OCM retaliation after she leaked a conversation with Fagon where he described the agency having intimate knowledge of businesses importing illegal cannabis from other states and selling it in New York dispensaries.
After the contents of the conversation were printed, Fagon called a NY Cannabis Insider reporter, yelling, cursing and singling out Argie by name as the source of the leaked audio.
“I know it was Jenny,” Fagon said during the call in November. The reporter did not divulge the source of the recording.
Less than a month later, on Dec. 12, 2023, the OCM sent out a nationwide press release about its first and only cannabis recall to date, alleging Argie’s products were unsafe after one of her lines of edibles had fallen one milligram shorter than what was advertised.
Jenny Argie, a licensed Adult-Use Conditional Processor, speaks before the NYS Senate Subcommittee on Cannabis on Oct. 30, 2023.NYS Senate
The recall drew attention as selective and overbearing. Previously, the OCM had modified its testing requirements following a NY Cannabis Insider investigation into inaccurate THC levels displayed on products. It also discounted public health concerns over unsafe quantities of bacteria and mold and higher-than-advertised THC levels among top-selling brands.
Yet many of those products remain on shelves today.
“It was just all of a sudden, all of these people calling me for comments, my name in the news and I didn’t know what to do,” Argie said in December. “People questioned whether my product was safe …. We remedied it immediately.”
Before the recall, Argie’s products were catching on in popularity and carried a hefty price tag –– targeting a wellness niche in the market –– due to the extraction method, which retains natural properties from the flower while distilling its main compound, THC, according to Argie.
In March, Argie came forward as the source of the leaked audio in hopes of clearing her brand name and reputation.
When NY Cannabis Insider reached out to OCM for a comment about Argie’s allegations, the state regulatory body conducted a surprise inspection and issued a full stop-work order at her facility due to her use of R134a.
Argie’s facility has been closed since, with her employees laid off and her company now teetering on the verge of bankruptcy.