New York Seeking to Revoke Cannabis Licenses from Company Accused of ‘Rent-a-License’ Scheme

New York state regulators are seeking to revoke the processing and distribution licenses of Omnium Health, Inc., claiming the company facilitated a scheme that allowed unlicensed cannabis businesses to “rent” its license and produce cannabis at its facility, which it then sold to retailers across the state.  

In a statement, Felicia A. B. Reid, executive deputy director of the Office of Cannabis Management (OCM), called the alleged conduct “a blatant breach of the licensing rules designed to ensure transparency and fairness in the legal 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.” — Reid in a press release 

OCM launched the 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 agency alleges that Omnium, under the cover of its status as a New York licensee, let unlicensed businesses use Omnium facilities and resources, and charged the businesses rent in creating a ‘rent-a-license’ or ‘reverse licensing’ scheme. These businesses then produced and packaged cannabis and got the products into dispensaries. 

James Rogers, Trade Practices Bureau Director, said in a statement that “This kind of cheating robs compliant businesses of their right to compete in a fair market.”  

The state alleges violations including aiding and abetting unlicensed processing, material misrepresentation, and failure to disclose substantial changes in business operations. OCM is seeking to revoke both Omnium’s processor and distributor licenses, prohibit the company from applying for future licenses, and impose civil penalties related to the projected revenue from the sale or possession of the unauthorized cannabis products. The agency also ordered a recall from the retail market of all products made by unlicensed processors, and will seek the destruction of unlawfully produced cannabis products.