The New York State Office of Cannabis Management (OCM) issued charges against Omnium Health, a processing and distribution licensee, for allegedly facilitating a scheme that allowed unlicensed cannabis businesses to hide under its license and produce cannabis sold to retailers across the state.
"I have heard so many in New York cannabis call for fairness at every level. Omnium’s alleged conduct is a blatant breach of the licensing rules designed to ensure transparency and fairness in the legal market," said Felicia A. B. Reid, Executive Deputy Director of the Office of Cannabis Management. “Our State’s cannabis laws are clear: licenses are not transferable and only licensed operators may produce and distribute cannabis. OCM’s move today ensures that regulated businesses do not exploit loopholes or take advantage to undermine legal operators who play by the rules.”
OCM launched its investigation into Omnium in February 2025 following a referral from the agency’s Compliance team to the Trade Practices Bureau (TPB). TPB investigators examined audit and inspection records, reviewed contracts between Omnium and the unlicensed businesses, and took testimony from several witnesses.
The NOP alleges that Omnium, under the cover of its status as a New York licensee, let unlicensed businesses use Omnium facilities and resources. Omnium then charged these businesses rent—creating a ‘rent-a-license’ scheme, also known as ‘reverse licensing.’ These businesses then produced and packaged cannabis and got that product into dispensaries.
The OCM said this arrangement gave unlicensed operators an unearned backdoor into New York’s regulated market, undermining the integrity and transparency.
The alleged violations include aiding and abetting unlicensed processing; material misrepresentation; and failure to disclose substantial changes in business operations.
OCM is seeking the following penalties:
- Revocation of both processor and distributor licenses
- Debarment from applying for future licensure
- Civil penalties related to the projected revenue from the sale or possession of the unauthorized cannabis products
- Retail recall from the market of all products made by unlicensed processors
- Destruction of unlawfully produced cannabis products
