The top official at the New York State Bureau of Cannabis Control is set to step down this fall following the conclusion of an inspector general investigation into allegations of targeted policing in retaliation against licensees who spoke out against the agency in question.
The IG’s investigation into OCM’s chief equity officer, Damien Fagon, concluded earlier this month. The allegations were found to be unfounded.
Fagon met with OCM’s acting executive director on Thursday and announced his retirement, effective Nov. 27, and appointed Felicia Reed as deputy executive director.
“I know Fagon has done a fantastic job leading OCM’s equity investments and preparing OCM to take the most innovative, equity-first approach to advancing New York’s cannabis industry,” Reed said in a statement Friday. “I thank him for his time and talents and wish him the best and great success in his future endeavors.”
The inspector general’s office declined to comment on the investigation or its conclusions.
According to the six-page Final Action Report of the investigation, the Inspector General’s office received three complaints related to Fagon — two from processor and dispensary license applicants in March and one from an OCM employee in June — alleging that Fagon interfered with various license applications. Those complaints, along with a NY Cannabis Insider report that first highlighted Fagon’s alleged misconduct, sparked the investigation.
As part of its investigation, the inspector general interviewed several OCM staff members and reviewed numerous documents, recorded phone calls, OCM emails and other internal communications, including allegations that Fagon knew OCM was not enforcing state law after discovering that licensees were illegally sourcing products from out of state.
According to the report, the inspector general was unable to conclude that Fagon’s conversations or comments violated OCM policy.
Fagone, who was placed on administrative leave in May when the investigation began, will remain on administrative leave until his resignation takes effect, the ministry said in a statement. His resignation letter was not immediately available as of Friday.
“Until then, Mr. Fagon will be taking a leave of absence to focus on transitioning his equity portfolio into OCM’s leadership,” Reed said of his November resignation date.
Licensed cannabis processor Jenny Arzy filed a retaliatory lawsuit against Fagon after her product, Jenny’s GeeGee Gummies, was first recalled amid reports that OCM was failing to enforce state regulations and causing market confusion due to inadequate labeling and testing. OCM subsequently inspected Arzy’s facility and issued a partial stop work order due to concerns that her products contained unapproved solvents.
The inspector general found no evidence of wrongdoing or ulterior motives, determined that the recall and partial stop-work orders were appropriate and unrelated to Fagon, and concluded that the allegations of retaliation were unfounded.
“OCM is conducting routine inspections of all its treatment facilities and Argie’s facility was scheduled to be inspected by the end of the schedule,” according to the report.
Applicants for conditional adult-use retail pharmacy licenses complained that Fagon was interfering with the licensing process, but refused to be interviewed by the inspector general or provide any additional information to the office.
According to the IG report, OCM’s director of licensing denied allegations that Fagon asked to expedite or manipulate certain applications.
The Bureau of Cannabis Control said it plans to announce an opening for a chief equity officer position in the coming days. OCM officials said Fagon will help with the transition.
The Cannabis Control Board approved Fagon, a third-generation farmer, for the position in June 2022. He is the only person to hold the position since the department was established in 2021.
Earlier this spring, sources told Spectrum News 1 that Fagone would be fired from the station once the investigation was concluded.
