New York’s cannabis regulators have announced they are taking legal action against a Long Island-based company, alleging a widespread scheme that allowed unlicensed products to enter the state’s legal market. The New York State Office of Cannabis Management (OCM) has filed multiple charges against Omnium Health Inc., also known as Omnium Canna, a licensed processor and distributor. The agency alleges that Omnium facilitated a deceptive “rent-a-license” operation, undermining state laws and the integrity of the regulated cannabis industry.
The OCM has not only filed a Notice of Pleading detailing the charges but has also ordered a statewide retail recall of all products linked to Omnium. The state is seeking severe penalties, including the complete revocation of Omnium’s licenses, a ban on future licensure, and significant monetary fines.
The Allegations Against Omnium
The investigation into Omnium in New York, began in February 2025 after the OCM’s Compliance team referred the case to its newly formed Trade Practices Bureau (TPB).
At the core of the OCM’s case is the accusation that Omnium Health created a “rent-a-license” or “reverse licensing” scheme. According to the Notice of Pleading, Omnium allegedly allowed unlicensed businesses to use its licensed facilities and resources in exchange for rent. This practice effectively provided these illicit operators with what the OCM called “an unearned backdoor” into the legal marketplace, enabling them to manufacture and package cannabis products that were then sold to licensed retailers across New York.
“Reverse licensing has no place in New York’s market,” said James Rogers, Trade Practices Bureau Director. “This kind of cheating robs compliant businesses of their right to compete in a fair market. Acting Executive Director Reid set up the Bureau to address these kinds of threats to market integrity. The TPB team is grateful to all the individuals who came forward with crucial information and encourage others to do the same. If we work together, we can keep New York’s
cannabis market above board.”
New York Cannabis Regulators Highlight Alleged Scheme
During their investigation, which involved reviewing contracts, examining audit records, and interviewing witnesses, OCM officials found evidence of these rental agreements. For example, investigators found product packaging labeled “Omnium d/b/a MFused” and concluded that MFused, an outside company, was renting Omnium’s premises and license to operate.
The New York Times also reported connections between Omnium and other popular brands like Stiiizy and Grön, noting that Grön was still renting space in Omnium’s facilities. However, in a statement to Cannabis Business Times, Grön called the report “inaccurate,” asserting it operates in a separate building in full compliance with OCM regulations.
Investigators also discovered unlabeled THCA isolate at Omnium’s facility. They suspect Omnium used this to illegally boost the THC potency of products. The OCM found no evidence that the state’s regulated system produced this THCA isolate. These actions, the OCM argues, amount to aiding and abetting unlicensed processing, material misrepresentation, and a failure to disclose substantial changes in business operations.
“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.”
Penalties and a Statewide Recall
The OCM is pursuing a range of severe penalties against Omnium Health to address the alleged violations. The agency has made it clear that it intends to send a strong message to the industry that such conduct will not be tolerated.
“Omnium’s actions violated core principles of our regulatory framework and placed unvetted operators into the heart of New York’s legal market,” said Stephen Geskey, OCM Deputy Executive Director of Labs, Compliance, and Licensing. “This is a textbook example of reverse licensure, and OCM will not tolerate it.”
The proposed punishments include:
- Revocation of Licenses: The OCM is seeking to revoke both of Omnium’s processor and distributor permits.
- Debarment: The agency wants to prevent Omnium’s principals from applying for any future cannabis licenses in New York.
- Civil Penalties: Regulators are seeking unspecified fines tied to the projected revenue from the sale of the unauthorized cannabis products.
- Product Recall and Destruction: A statewide recall has been ordered for all products made by unlicensed processors at Omnium’s facility. The OCM also plans to destroy all unlawfully produced cannabis products.
The charges against Omnium Health represent a critical moment for New York’s legal cannabis industry. As the OCM proceeds with its case, the outcome will likely have far-reaching implications for how the state regulates and enforces its cannabis laws.
For now, however, the industry watches closely as regulators work diligently to uphold the integrity of one of the nation’s largest cannabis markets.
