New York state regulators have launched a significant enforcement action against Omnium Health, Inc., a prominent Long Island-based cannabis processor, alleging the company operated a “rent-a-license” scheme that allowed unlicensed entities to produce and distribute cannabis products within the state’s legal market. This crackdown by the Office of Cannabis Management (OCM) has prompted a popular edibles brand, Grön, to threaten legal action if its products are included in an impending state-ordered recall.
Omnium Health Accused of Facilitating ‘Rent-a-License’ Scheme
The OCM initiated its investigation into Omnium Health in February 2025 following a referral from its compliance team. Investigators allege that Omnium, under the guise of its state processing and distribution license, permitted unlicensed businesses to utilize its facilities and resources. In exchange, Omnium reportedly charged these unlicensed operators rent, a practice commonly known as “reverse licensing” or a “rent-a-license” scheme. This arrangement allegedly provided an illicit pathway for unregulated cannabis products into New York’s legal dispensaries, undermining the state’s commitment to an equitable and transparent cannabis industry.
“Omnium’s alleged conduct is a blatant breach of the licensing rules designed to ensure transparency and fairness in the legal market,” stated Felicia A. B. Reid, Executive Deputy Director of the OCM. The OCM is seeking severe penalties against Omnium, including the revocation of its processor and distributor licenses, a lifetime ban from applying for future cannabis permits, substantial civil fines, and a recall of all products produced under this alleged scheme.
Major Brands Face Potential Product Recall
As a consequence of the investigation, several high-profile out-of-state cannabis brands that utilized Omnium’s facilities have been identified as potentially subject to a broad product recall. These include Oregon-based Grön, California-based STIIIZY, and Washington-based Mfused. The OCM has emphasized that this recall is a precautionary measure tied to licensee compliance violations, not to product quality or contamination issues.
Grön Pushes Back, Threatens Legal Action
Grön, a prominent edibles brand, has sharply contested its inclusion in the enforcement action and the potential recall. Draper Bender, President of Grön, asserted that the company’s arrangement with Omnium was a “white label agreement,” not “reverse licensing,” and crucially, that this deal had received prior approval from state regulators. Bender indicated that Grön maintains its own separate Type 2 processing license in New York and operates independently from Omnium’s facilities. He further claimed that media reports have misrepresented Grön’s operations and compliance record, and stated the company is prepared to sue the OCM if its rights are infringed upon.
However, OCM inspection findings from April 2025 reportedly noted violations at Omnium’s facilities, including mislabeled Grön products that lacked state-mandated consumer warnings and proper quality assurance documentation.
Upholding Market Integrity and Future Outlook
The OCM maintains that its actions are essential to protect consumers and uphold the integrity of New York’s regulated cannabis market. “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,” said Reid. The OCM’s Trade Practices Bureau Director, James Rogers, characterized the alleged actions as “textbook reverse licensure” that “robs compliant businesses of their right to compete in a fair market”.
Omnium Health and related parties have been given a deadline of November 3, 2025, to formally respond to the charges and submit required documentation. The outcome of this deadline, Omnium’s response, and the OCM’s subsequent decisions will dictate the scope of any product recall and its ripple effects across the trending cannabis industry in New York and beyond. This unfolding news highlights the ongoing challenges in regulating a rapidly evolving market and ensuring fair competition for all participants, from cultivators to consumers seeking quality cannabis strains. This news is a significant development in the legal cannabis sector.
