A top official in the New York state Office of Cannabis Management will resign this fall following the conclusion of an inspector general investigation into allegations he used targeted enforcement to retaliate against licensees who spoke out against the embattled agency.

The IG's probe into OCM Chief Equity Officer Damian Fagon concluded earlier this month. The claims were found to be unsubstantiated.

Fagon met with OCM acting Executive Director and appointed Executive Deputy Director Felicia Reid on Thursday about his departure, which will take effect Nov. 27. 

"I know that Mr. Fagon has done tremendous work leading OCM’s equity efforts, setting up OCM to take the most innovative and equity-driven approach to the development of New York’s cannabis industry," Reid said in a statement Friday. "I am thankful to him for his time and talent. I wish him well and great success in his future endeavors.”

The inspector general's office declined to comment on the investigation or its conclusion. 

The probe's six-page closing activity report reveals the IG's office received three complaints related to Fagon: Two in March from a processor and dispensary license applicant and another in June by an OCM employee alleging he interfered with various license applications. Those complaints, and an NY Cannabis Insider report that first highlighted allegations of Fagon's misconduct, prompted the investigation. 

The inspector general interviewed several members of OCM staff and reviewed numerous documents, recorded phone calls, OCM emails and other internal communications as part of the probe, which included claims Fagon knew OCM was not enforcing state law after discovering licensees illegally sourced out-of-state product.

The inspector general was unale to conclude Fagon's conversations or statements violated OCM policy, according to the report.

Fagon, who was placed on administrative leave in May at the start of the investigation, will remain on leave until his resignation is effective, according to the department. A resignation letter was not immediately available Friday.

“Until that time, Mr. Fagon will be on leave, and will focus solely on transitioning his equity portfolio to OCM leadership," Reid said of his November resignation date.

Licensed cannabis processor Jenny Argie filed a retaliation complaint against Fagon after OCM issued its first-ever product recall of her product, Jenny's Zee-Zee Gummies, for label and testing deficiencies amid reports the department was not enforcing state regulations to avoid market disruptions. OCM later inspected Argie's facility and issued a partial stop work order after concerns her product contained an unapproved solvent.

The inspector general did not find evidence of foul play or ulterior motive, and found the recall and partial stop work order were appropriate and independent of Fagon and concluded the retaliation allegations unsubstantiated.

"OCM was in the process of conducting routine inspections of all processing facilities and Argie's facility was set to be inspected by the end of the schedule," according to the report. 

The Conditional Adult-Use Retail Dispensary license applicant who complained Fagon was interfering with their approval process refused to be interviewed by the inspector general or provide additional information to the office.

OCM's director of licensing denied allegations that Fagon requested certain applications be expedited or manipulated, according to the IG's report.

The Office of Cannabis Managment will publish a listing for the chief equity officer position in the coming days, according to the agency. OCM officials said Fagon will assist with the transition.

The Cannabis Control Board approved Fagon, a third-generation farmer, for the position in June 2022. He was the only person to have served in the role since the state department was established in 2021.

Earlier this spring, sources told Spectrum News 1 that Fagon would be removed from the agency after the investigation concluded.