New York State’s cannabis industry is facing renewed turmoil as budget changes, industry backlash, and a major product investigation converge to test the resilience of the troubled legal cannabis market.

Following the passage of the state’s $254bn budget last week, Tremaine Wright, chair of the Cannabis Control Board (CCB), quietly saw her $229,000 annual salary cut entirely.

As such, her compensation will now be in line with other unpaid state board chairs, who receive a stipend of $260 for every meeting or event they attend.

Wright, appointed in 2021, said she accepted the post before any salary was set, and confirmed that she will continue in her position despite the loss of an annual salary.

Governor Kathy Hochul’s office defended the move as a step toward streamlining cannabis governance. But the quiet nature of the cut, and its timing amid a broader overhaul of the Office of Cannabis Management (OCM), has raised questions about the direction of state oversight.

The OCM is also now investigating two of the most prominent producers in the cannabis vape market,  Stiiizy and Mfused, over allegations that they sold products made with cannabis sourced from unlicensed, out-of-state suppliers. Regulators have halted sales of the affected vape cartridges and pre-rolled joints, valued at roughly $10 million, as the probe continues.

New York law requires that all cannabis products sold in the state be cultivated, processed, and packaged entirely within its borders. The rule is intended to support local farmers and ensure transparency. The products in question were processed by Omnium Health, which insists any confusion stemmed from a documentation error and says all extraction occurred in a state-licensed facility.

This latest disruption follows a tumultuous year for New York’s legal cannabis rollout. Former OCM Executive Director Chris Alexander was asked to step down in 2023 after an independent review found widespread dysfunction within the agency. Delays, lawsuits, and poor communication had left hundreds of licensing applicants in limbo and allowed illicit sellers to dominate the market.

Industry stakeholders, however, remain deeply divided. Boris Jordan, CEO of Curaleaf, a pioneer in New York’s medical cannabis market, has accused state regulators of marginalising established operators.

Speaking to the New York Post, Jordan criticised the state’s demand for multi-million-dollar fees to transition into the recreational market and its alleged failure to police illegal out-of-state cannabis products entering legal stores.

“New York asked us to invest, and now they’re trying to bring us down,” Jordan said. “It’s very un-American.”

Six of the state’s original ten medical cannabis firms have opted not to expand into adult-use sales due to these regulatory hurdles. The number of registered medical patients has dropped from 150,000 in 2021 to just 95,000, even as recreational dispensaries proliferate.