Photo credit: Vinnikava
In New York’s fast-growing legal cannabis market, competition is fierce, the stakes are high, and the rules are still taking shape. Amid this evolving landscape, the Office of Cannabis Management (OCM) has quietly stood up a critical but often overlooked unit: the Trade Practice Bureau (TPB). Tasked with ensuring fair market conduct, the TPB is emerging as the watchdog agency insiders are learning they can’t ignore.
A New Frontier in Enforcement
The bureau operates with a clear mission: prevent anti-competitive behavior and unethical business practices in the cannabis industry. Modeled in part after the New York State Liquor Authority’s oversight mechanisms, the TPB investigates allegations of coercive contracts, slotting fees, pay-to-play distribution deals, improper financial entanglements, and more.
These violations aren’t theoretical. As entrepreneurs fight to secure shelf space and survive in a capital-intensive market, reports of predatory partnerships and exclusionary behavior are growing. TPB aims to act early to prevent the cannabis industry from replicating the monopolistic trends seen in other regulated sectors. By intervening early, the TPB hopes to avoid the industry consolidating into the hands of a few powerful players. This is an outcome already seen in other regulated industries such as alcohol and pharmaceuticals.
Tools and Tensions
TPB has the authority to conduct audits, issue subpoenas, and refer cases for disciplinary action. But enforcement comes with its own complications. Many licensees are still learning what the rules are. TPB must walk a fine line between deterrence and education, balancing its role as an enforcer of the law with its responsibility to help new and often inexperienced licensees understand the complex regulatory landscape.
In a newly legalized and rapidly evolving industry, many operators—particularly those from communities disproportionately impacted by prohibition—may unintentionally violate rules due to confusion or lack of resources. The bureau must ensure they hold bad actors accountable. It must do so without penalizing those who are earnestly trying to comply but need guidance. This dual approach aims to foster a compliant, informed marketplace without stifling innovation or discouraging participation.
According to OCM leadership, the bureau is actively reviewing business practices across licensing tiers—with a particular focus on the distribution and retail sectors, where vertical integration and consolidation pose the greatest risks.
Yet enforcement comes with complications. Many licensees are still learning the rules, and few have in-house legal teams to navigate regulatory minefields. That means the TPB must walk a fine line between punitive enforcement and proactive education. In its public messaging, the bureau has emphasized its commitment to transparency and fairness. But insiders note that penalties are very real for those who ignore compliance requirements.
Have Any Cases Been Adjudicated?
While the TPB does not yet publish a regular docket of enforcement decisions, several known investigations have already emerged. In late 2024, OCM initiated a compliance review of multiple distributors suspected of requiring shelf space payments from smaller retailers—allegedly violating the state’s ban on slotting fees. According to sources close to the investigation, several businesses were issued compliance directives, with at least one facing a license suspension hearing.
Another reported case involved a series of financial arrangements that masked true ownership stakes. This is what OCM refers to as “undisclosed True Party of Interest (TPI)” violations. In these instances, larger investors attempted to route funding through intermediaries to conceal controlling influence in multiple licenses. The TPB identified these arrangements through a combination of financial disclosure reviews and whistleblower tips.
Although formal adjudications are limited thus far—perhaps in part due to the nascent state of the market—observers expect that the TPB will take a more public-facing enforcement stance in the coming year. The bureau is reportedly drafting a series of technical guidance documents to clarify rules around TPIs, shelf space arrangements, and third-party branding deals.
Lessons from California
New York is not the only state wrestling with how to police fairness in a newly legal cannabis market. California, the nation’s largest cannabis economy, has developed several enforcement mechanisms of its own. Though, with markedly different results.
In California, enforcement is split across multiple agencies. This includes the Department of Cannabis Control (DCC), which oversees licensing and compliance. However, California has struggled to rein in anti-competitive behavior, largely due to a lack of funding and fragmented jurisdiction. Despite a robust regulatory framework, critics argue that enforcement often lags, allowing wealthier businesses to skirt rules without immediate consequence.
One California analogue to the TPB is the state’s equity oversight mandate, particularly in cities like Los Angeles and Oakland. Yet the enforcement of those policies has been inconsistent, and consolidation continues to reshape the landscape. In fact, some equity licensees in California have faced similar challenges to those in New York. This includes unclear financial terms, deceptive contracts, and unequal access to distributors and supply chains.
For New York’s OCM, California serves as both a cautionary tale and a point of comparison. New York’s market is smaller. But its regulators have repeatedly stated their intention to avoid the pitfalls of West Coast legalization. Chief among them, allowing unchecked consolidation to undermine equity goals.
The Road Ahead
With over 1,700 licenses now issued and new operators entering the market monthly, the potential for abuse is only growing. Based on OCM’s recent public comments and enforcement trends, the TPB appears to be prioritizing proactive audits and financial disclosure reviews—particularly in distribution and retail, where the risk of consolidation poses a significant equity challenge.
As the industry matures, many expect the TPB to expand its scope—targeting hidden ownership structures, off-the-books partnerships, and enforcement gaps that could favor well-capitalized operators over social equity businesses.
For now, the TPB remains one of New York’s most important regulatory experiments: an attempt to shape not just who gets to sell cannabis, but how cannabis gets sold.
Leave a Reply