The truth is simple: New York’s cannabis regulators are not failing equity applicants — they are sacrificing them. Through the so-called “proximity rule,” Patrick McKeage and the OCM applied rules when they crippled justice-involved operators, then rewrote them when insiders stood to gain. In one case, they even entertained fraudulent agreements signed in the name of a man who had already died. This isn’t equity.
It’s exploitation disguised as governance, and it reveals how power in New York’s cannabis market is being traded — not earned.
Equity Promised. Equity Denied.
When New York legalized cannabis, lawmakers swore that justice-involved applicants and harmed communities would come first. But on the ground, the rollout tells another story: equity applicants locked out, insiders let in.
Sonz of Cannabis LLC — majority owned by Shem Hodge (51%) with investor Terrance Mumford (49%) — should have been a success story. They secured a pre-approved Manhattan site at 461 Seventh Avenue and invested over $1 million in leases and buildouts.
Instead, their dream became a case study in corruption.
The Proximity Rule: Selective by Design
In early 2024, OCM Deputy Director Patrick McKeage denied Sonz’s license under the “proximity rule.”
When Sonz requested a waiver, McKeage’s answer was blunt: “no process exists.” But months later, he rolled out a waiver process — only for November Queue applicants, not equity/CAURD licensees.
Meanwhile, Flowery / Open Sky 26 LLC, politically connected players, were allowed to file waivers for the same location — even without a valid lease.
Translation: Equity was blocked. Outsiders were given priority.
This timeline shows exactly when the rules moved
The Dead Don’t Sign Deals
Here’s where the trap turns sinister.
Sonz’s paperwork listed a deceased shareholder. Instead of asking for a routine correction, regulators used it as a weapon. After Shem Hodge’s tragic death in 2023, fraudulent agreements appeared, claiming he had bound Sonz to Open Sky 26 LLC — long after his death certificate proved otherwise. Regulators entertained these agreements as if they were valid.
Translation: Bureaucrats turned a man’s death into leverage to strip his company of its license.
The Proximity Trap in action: Sonz of Cannabis (954.5 ft) was denied a waiver with the excuse ‘no process exists,’ while November Queue applicants at similar distances were fast-tracked and approved. Equity applicants blocked, connected players rewarded.”
Who Lost, Who Gained
Lost: Sonz of Cannabis. Over $1M in equity investment tied up in a site they could never open. Gained: Flowery / Open Sky 26 LLC, who pressed forward with waiver applications despite not controlling the location.
The rules didn’t collapse — they were enforced when they punished equity, and bent when they served insiders.
The rules didn’t collapse — they were enforced when they punished equity, and bent when they served insiders.
Translation: The “proximity trap” isn’t a glitch. It’s a system designed to fail equity.
The Proximity Law isn’t about safety or community balance — it’s about selective enforcement.
In New York’s cannabis rollout, equity applicants like Sonz of Cannabis are denied despite ~954 ft distance. They request waivers, only to be told “no process exists.” Meanwhile, CONBUD and Happy Munkey, with similar or closer proximity, sail through licensing and expansion. And Flowery / Open Sky 26 LLC, without even a valid lease, push a PCA waiver claim — yet another privilege for well-connected players.
The Receipts
Exhibit A – OCM Denial Letter (Jan 2024): cites “proximity.” Exhibits D–F – Waiver requests: Sonz applied, OCM said “no process exists.” Exhibit G – Shareholder Agreement: shows Hodge + Mumford, plus fraudulent transfers tied to Open Sky. Death Certificate of Shem Hodge – Proof he could not sign after his passing. Exhibit H – OGS Report (May 2024): confirms OCM had no waiver system when Sonz applied. PCA filing by Flowery/Open Sky – Requests relief other CAURD holders were denied.
https://drive.google.com/drive/folders/1QsL25Ulzi5-z8a0EDJ9DNpsyPPkF0Xee
Why It Matters- CANNABRITE Final Word
This is Volume 1 of the Proximity Trap — but it already shows the playbook in full.
Equity was promised, but stolen. The rules were weaponized against those they were meant to protect. And when an equity applicant died, his memory was not honored — it was exploited.
Patrick McKeage’s hands are all over this. He denied waivers when equity applicants begged for relief, then created them later for insiders. He looked the other way at fraudulent documents signed in the name of the dead. He treated a man’s death not as a tragedy, but as an opportunity to clear the path for better-connected players.
That isn’t oversight. That’s complicity.
And here’s the deeper truth: if regulators can twist the law this way once, they can twist it again and again. Equity isn’t being lost by accident — it’s being bled out, siphoned upward to the same people equity was supposed to keep out.
New York promised justice. What it delivered through men like McKeage was a trap — and the dead don’t sign deals.
