West Babylon cannabis product manufacturer fined $50,000 for cross-tier rules violation

A West Babylon cannabis product manufacturer has been fined $50,000 by the state for violating cross-tier manufacturing and retail rules by creating products for a dispensary in Manhattan.

Basin Mixtures, which also has a facility in Brooklyn, created vapes, gummies and pre-rolled marijuana cigarettes at its West Babylon location for Charlie Fox dispensary in Manhattan, according to the state Office of Cannabis Management. The dispensary then sold the products under its own Charlie Fox brand, the OCM alleges.

The OCM prohibits cannabis companies from being on both the supply and retail side of operations: manufacturing and processing facilities cannot provide products for sale under a dispensary’s brand, and dispensaries cannot sell products under their own brand.

According to an OCM spokeswoman, a tip came in about the cross-tier violation that led to an investigation by the office’s newly created Trade Practices Bureau. In a news release, the OCM said both companies “admitted that sufficient evidence exists to sustain the OCM’s finding of violations.”

The release stated that OCM had reached a settlement with the companies, which will have to pay $50,000 each in fines and must work to update internal compliance procedures as well as employee training.

“The core of TPB’s work is to hold licensees accountable and uphold the integrity of New York’s cannabis marketplace,” Acting Executive Director of OCM Felicia A.B. Reid said in the press release. “While the Bureau’s work is still in its early days, I am heartened to see these resolutions — the first concluded cases in an ever-growing docket of trade practice investigation matters.”

Basin Mixtures did not respond to requests for comment. Charlie Fox did not answer questions submitted to the company but emailed a statement from managing member William Norgard, who said there had been a “branding and promotion issue pertaining to a specific line of products produced” for the company and that the products “were removed and our licensed retail operation is again fully compliant with all OCM and TPB regulations.”

Basin Mixtures is the only cannabis processing facility in Babylon Town, according to the OCM. There are four dispensaries and one delivery business in the town.

Reid toured Basin Mixtures’ 25,000-square-foot facility in West Babylon in January during a tour of Long Island cannabis businesses. She told Newsday then that it was “incredible to see how they take product from oil or seed or flower and put it into a product that really serves New Yorkers.”

“Being here and seeing what they do every single day is really impactful for me as a regulator because that allows me to get a sense of the things we need to be paying attention to and looking at as an agency,” she said.

The West Babylon building opened last July, according to Matthew Dill, operator of The Sauce, Basin Mixture’s brand of products. In January, Dill said the company had 28 employees and their products were in 180 dispensaries.

“As the industry has been growing, we’ve been growing,” Dill said at the time. “There’s a high demand for products right now.”

By Denise M. Bonilla

denise.bonilla@newsday.comdenisebonilla

Denise Bonilla has worked at Newsday since 2003 and covers the Town of Babylon, including the villages of Lindenhurst and Amityville.