Out-of-State, Out-of-Control: When the Hype Doesn’t Cross State Lines

In theory, multi-state branding (MSB) sounds like the future—national recognition, sleek packaging, and familiar products from coast to coast. But in practice, it’s a shaky game of trust and optics, held together by little more than marketing and “good faith” deals. And as recent investigations in New York show, the cracks are starting to show.

New York’s Crackdown on Interstate Brands

Regulators in New York have launched investigations into major brands accused of sourcing out-of-state product and repackaging it for legal sale within the state. Brands like Stiiizy, Mfused, and Grön are being scrutinized for their ties to Omnium Canna, a Long Island-based processor that’s reportedly been behind the production of over $47 million worth of products since October 2023. While these companies claim the probes are just routine audits, the underlying accusation—that out-of-state supply is slipping into legal markets—is anything but routine.

This isn’t isolated. States like California and Michigan are also battling shadow operations and unlicensed products that mimic legitimate brands. Legal markets are drowning in untracked, low-quality product disguised in premium packaging. For consumers, the line between “real” and “faked” becomes dangerously blurry.

The Branding Illusion

At the core of the issue is how these MSBs actually operate. Unlike traditional consumer goods companies that own their manufacturing and distribution, most brands don’t control their production across state lines. Due to federal law, they can’t. So they enter states by licensing their name to local operators—who are responsible for cultivation, processing, and distribution.

This setup is a gamble. The brand typically sells packaging to the license holder, who fills it with locally sourced product and sells it under the national brand name. In exchange, the MSB brings in marketing muscle, social media, and hype. But as one New Mexico analyst pointed out during a conversation with a national brand rep: “What’s stopping me from buying your packaging, stuffing it with garbage, and wrecking your brand?” The answer: nothing. There is no centralized quality control—just hope and reputation.

Same Soil, New Label

Even when the local operator is competent, the branded product often comes from the same building, same grower, same nutrients as their other offerings. What changes? Just the label. Without proprietary genetics or a unique SOP, there’s no real difference between the house brand and the “big name” MSB. Consumers pay a premium for the sizzle, but the steak is the same.

This creates a dangerous dynamic where branding becomes a mask, not a marker of quality. The real work—genetics, production, consistency—gets lost in the noise of influencer campaigns and media blitzes.

What Needs to Change

For MSBs to survive long-term, the model has to evolve. True brand consistency demands vertical integration or ironclad SLAs (Service Level Agreements) with local partners, backed by real audits, genetic sourcing, and post-harvest control. Anything less is just gambling with reputation.

Until then, consumers are left navigating a market flooded with lookalike jars and empty promises. And regulators—like those in New York—are finally calling bullshit.