The transition to the new cannabis tracking system in New Mexico is leaving some businesses unable to sell products, leading to steep financial losses, Source NM reports. The new system, New Mexico Seed to Sale (NMS2S), launched September 1 but retailers have experienced issues making the transition from the old system, BioTrack, to the new one. When BioTrack went offline on September 7, it crashed and did not properly add inventory to NMS2S. 

Matt Kennicott, executive director of the New Mexico Cannabis Association (NMCA), told Source NM that one retailer had about 50,000 items that failed to transfer over from the old system, leaving “hundreds of thousands of dollars of inventory” unsellable by the retailer. 

Another retailer had $150,000 worth of its top-selling product erroneously labelled as a different product, which prevented further sales; while one of the state’s larger retailers had $460,000 worth of product miscategorized, all of which it was unable to sell.   

One retailer told Kennicott that they had so many issues they will likely have to hire one full-time and one more half-time employee to fix the errors. 

Sabrina Aragon, chief operating officer of High Desert Relief, told Source NM that the new system requires testing results for products that were transferred from the old system to be manually entered, which means customers will have to trust that retailers aren’t accidentally, or purposely, entering numbers incorrectly. 

Aragon gave the new system “a 4-out-of-10 on functionality right now, just from an operational standpoint.” She noted that the new system also requires dispensary employees to manually calculate the three different levels of taxes – county, state, and excise – on each sale. Kennicott called that “a deep, deep flaw within the system” that regulators told him would take “at least six months” to fix. 

Kennicott indicated that businesses may revive a lawsuit that sought to allow businesses to continue using BioTrack until NMS2S is proven to work properly. He said the plaintiffs dropped the original lawsuit but that, given all of the problems, the plaintiffs could show a court “actual quantifiable harms, dollar amounts attached to them, things that actually happened because of how this rollout has occurred.”  

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Canada’s federal government recently published cannabis industry sales data for June 2026, and the industry set a new monthly sales record. According to Statistics Canada and as initially reported by StratCann, Canadian cannabis retailers sold $517.8 million (CAD) worth of cannabis in June 2026.

The setting of a new monthly record in Canada seemed to generate quite a bit of discussion among cannabis industry members and observers, yielding comparisons between the size of Canada’s legal cannabis market and the State of California’s market. There has also been considerable discussion in recent days about international cannabis imports and exports, with Germany setting a new quarterly record for cannabis imports in Q1 2026, data demonstrating that Australia imported a record total of medical cannabis in 2025, and Brazil’s medical cannabis import authorizations increasing significantly in the first half of 2026.

As the global cannabis industry becomes increasingly more connected, the United States continues to largely remain in ‘cruise control,’ at least from an international cannabis perspective. That is evident in cannabis import data from other countries, with Germany serving as a great example. Germany is currently the top destination for medical cannabis exports from other legal markets.

According to Germany’s Federal Institute for Drugs and Medical Devices (BfArM), Germany imported medical cannabis from 22 different countries between 2024 and 2026, with Canada as the top source by far. Portugal is in second place on the list, followed by Denmark and North Macedonia. The Czech Republic exported more medical cannabis to Germany in Q1 2026 compared to North Macedonia, but has historically trailed behind. The United States is not on the list at all.

Australia currently ranks second for medical cannabis imports, having imported over 81 tonnes of medical cannabis products in 2025. By comparison, Germany imported roughly 205 tonnes of medical cannabis in 2025. Similar to Germany, Canada is the top source for medical cannabis imports in Australia, although it is losing ground to Thailand.

In 2024, Australia imported about 1.1 tonnes of medical cannabis from Thailand and 62.1 tonnes from Canada. However, in 2025, Australia imported roughly 20.7 tonnes from Thailand and 49.1 tonnes from Canada. South Africa, New Zealand, and Colombia are other top sources for medical cannabis imports to Australia, but much like in Germany, the United States is absent from the import data.

The federal government in the United States is in the process of rescheduling cannabis from its current status as a Schedule I substance to Schedule III. Once that rescheduling process is complete, medical cannabis companies in the U.S. will finally have a path to make meaningful inroads into the global export market. With that being said, there will no doubt be some headaches for U.S. companies along the way.

For starters, medical cannabis exports will have to comply with the standards of other markets, such as the Good Manufacturing Practice (GMP) standards in European markets. The standard is by no means impossible for U.S. companies to meet, but it will require U.S. companies to adjust some of their practices. There is also the logistical consideration of shipping cannabis to far away markets, often over long periods of time. Markets in the U.S. are currently siloed and limited to state borders. Cannabis that is cultivated and harvested does not travel very far in the U.S., which is obviously different compared to exporting cannabis halfway around the world. It is not an insurmountable issue, but it is something that U.S. companies have historically not had to face.

Additionally, there is the basic math involved. Cannabis producers in the United States are certainly capable of producing large amounts of cannabis. There is no doubt about that. However, are U.S. producers capable of producing large amounts of cannabis that can meet the standards of other markets and do it in a way that makes U.S. cannabis economically viable in other markets? U.S. cannabis will have to compete with cannabis produced in places like Thailand and Colombia, where it is much cheaper to cultivate. Just as Canada is losing international market share to other countries, the United States will also have to compete in an increasingly crowded export market.

Another consideration is the rise of domestic production in legal cannabis markets. Many legal countries have historically relied on cannabis imports because their own production was either prohibited or their production infrastructure was not developed. But as time goes by, many of those same countries will increasingly produce their own medical cannabis, reducing the reliance on imports from other markets. Cannabis is, at the end of the day, an agricultural crop, and there will always be a need for imports and exports of it, but with the U.S. having already ceded such a big head start to other nations, it will be interesting to see if it can catch up or not. Only time will tell.

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Plaintiffs argue in the lawsuit that the result is “a single product is simultaneously legal ‘hemp’ and illegal ‘marijuana.’”

By Rebecca Rivas, Missouri Independent

A federal judge is being asked to decide whether Missouri’s new law banning intoxicating hemp products is clear enough to enforce in November or so contradictory that a constitutional challenge to it should move forward.

At the center of the dispute is the question of whether Missouri calls a product legal “hemp” in one part of state law and illegal “marijuana” in another.

The plaintiffs, led by the Missouri Hemp Trade Association, said in a filing this week that the state has created overlapping definitions, leaving businesses unsure what they can legally sell when the law goes into effect on November 12. They argue the case over House Bill 2641 deserves to be heard in court.

“Most judges would read [House Bill 2641] and go, ‘What is going on here?’” said Chuck Hatfield, attorney for the plaintiffs. “‘This seems like something we need to at least dig into and figure out.’ And that’s what our clients want is a day in court.”

The state says there’s no contradiction because the law specifically outlines which category controls: if it meets the definition of a hemp-derived cannabinoid product, it’s treated as marijuana. The state asked Judge M. Douglas Harpool of the U.S. District Court Western District of Missouri to dismiss the lawsuit earlier this month.

The state argues the case is part of a growing nationwide effort by the hemp industry to overturn similar state laws.

“The industry’s playbook is well established,” the motion to dismiss states, citing other federal cases where the challenges against other state legislation regulating intoxicating hemp have failed.

Plaintiffs hit back in their response this week, saying that Missouri’s law is different from the other states cited. These products will be considered marijuana in Missouri under the new law, they argue, and that’s where the legislation gets “unconstitutionally vague.”

The federal law distinguishing marijuana and hemp has brought intense debate both in the legislature and courts nationwide since Congress legalized hemp in 2018.

For Missouri, the lawsuit is the latest episode in a long saga to regulate intoxicating hemp products that, in previous years, has ended with lawmakers throwing their hands up in frustration.

When Congress legalized hemp in 2018, it opened a door for intoxicating products like hemp-derived THC beverages that are now found in grocery stores and bars throughout the state.

Congress closed that loophole in November by passing a federal ban that’s set to go into effect November 12. Missouri lawmakers said they intended to mirror that language by a law passed this spring.

However, plaintiffs argue in the lawsuit that the result is “a single product is simultaneously legal ‘hemp’ and illegal ‘marijuana.’”

The state argues in its motion to dismiss that it prevented this scenario because it “enacted provisions to guard against confusion.”

“In other words, to the extent that a hemp-derived cannabinoid meets the statute’s definition of ‘hemp’ and is not included in any of the statute’s exclusions from ‘hemp,’ then the product is not a ‘hemp-derived cannabinoid product’ for purposes of HB 2641’s central mandate,” according to the state’s motion. “It is that simple.”

The bill, sponsored by Republican state Rep. Dave Hinman of O’Fallon, will prohibit hemp products from containing more than 0.4 milligrams of THC per container, which is among the limits included in a provision in the federal spending bill Congress approved last year.

Even if Congress reverses course and decides to allow the sale of these products, Hinman’s bill would only permit them to be sold in Missouri’s licensed marijuana dispensaries. And if Congress chooses to delay the ban, Missouri would still ban all products, except for intoxicating beverages.

However, plaintiffs argue beverages are not specifically stated as being exempt.

The law lists types of products that would go into effect if there was a delay, which includes “any solid candy, gummy, chewable product, tablet, capsule, oil, baked good, or other solid edible.” It also includes products “that can be smokable or vapeable in the form of raw plant material, flower, or bud material and that contain any amount of tetrahydrocannabinolic acid.”

Beverages are thought to be allowed because they aren’t on the list of things that would go into effect. However, critics have said other products might be unintentionally exempt because they are not listed here, not just beverages, and the law just creates another loophole. Plaintiffs point to the carve-out clause as further reason the law is “difficult to parse.”

This list has become a bigger focus because Congress is currently considering delaying the federal ban.

Earlier this month, the U.S. Senate approved a measure to fund federal agencies until December 11, and it includes delaying the federal ban on intoxicating hemp THC products until that date.

It now goes back to the U.S. House for final approval before heading to the president’s desk.

This story was first published by Missouri Independent.

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The cannabis industry spent years predicting flower’s decline. Grown Rogue CEO and co-founder Obie Strickler argues that the prediction said more about industry executives than it did about consumers.

When we started Grown Rogue more than a decade ago, I kept hearing about how new form factors were going to make flower extinct. Edibles, concentrates, vapes, and capsules were all going to replace flower as the primary way people consumed cannabis.

That prediction came mostly from new professionals entering the industry, bringing experience in consumer packaged goods, real estate development, finance, and investing. They often believed a new, improved consumer was going to take over the market. Think affluent newcomers with disposable income who had never rolled a joint in their lives. Many of these “experts” were not regular cannabis consumers, and they completely missed the reality of who was actually buying.

I saw this play out in real time. In 2017, I took a family member to a dispensary for the first time. She was exactly the new consumer everyone was hunting for: disposable income, no prior history with cannabis, and curious about the whole thing. She spent the visit talking about how amazing the lamp near the entrance was while I was in the back inspecting the quality of the flower on the shelves.

When we left, I asked her what her preferred form factor was. Vapes, she said. Great, I said. How many vapes do you go through in a month? She laughed. Oh, maybe one or two a year.

That was the aha moment. Here was the consumer so many in the industry had bet on, and she was buying one or two vapes a year. The volume assumptions built around that new consumer were simply wrong. The people buying flower week in and week out, the ones actually driving category revenue, were the consumers everyone in the industry seemed to be writing off.

The Market Never Moved On From Flower

Flower and pre-rolls still command a huge share of the legal cannabis market, although the exact mix varies by state. Headset’s current industry data puts flower at $9.6 billion, or 39.4% of sales across 16 tracked state markets, for the 12 months ending June 2026. Pre-rolls accounted for another 15.8% and were the fastest-growing major category, increasing 10.1% year over year.

The 2026 State of the Pre-Roll Market Report, using Headset point-of-sale data from 15 states, found that pre-rolls generated nearly $3.6 billion in 2025. Infused products represented 47% of pre-roll revenue, leaving a little more than half of the category to non-infused formats. Headset has also observed that flower tends to begin with a higher market share in newer markets before declining as those markets mature and more product categories become available.

Concentrates and vapes have real audiences, and edibles have carved out their own category. None of that changes the fundamental reality that regular cannabis consumers keep coming back to flower.

A Flower-First Education

I grew up in Southern Oregon, born in a cabin with no electricity or indoor plumbing to parents who were true hippies. They had left the city to live something more humble and simple. The region sits at the northern edge of the Emerald Triangle, and, for good or bad, cannabis was as much a part of the fabric of those communities as anything else. People had relocated there in the 1960s and 1970s to live on their own terms, and growing became part of that history.

As I got older, I started “borrowing” flower from my big brother, who was probably “borrowing” it from my dad. Pretty quickly, that turned into growing my own once my habits outpaced anything that could go unnoticed.

That was when I started developing a real taste for quality flower, and that early curiosity turned into a genuine obsession with genetics. I wanted to know what had the best flavor, what produced the best experience, and why the same strain could taste completely different depending on how it was grown.

Sarah, my wife and co-founder, and I were both deep in this from a young age. We were growing our own flower in the hills, entering Oregon’s medical program to add a layer of safety and legitimacy, and spending a lot of time with friends who were just as serious about the plant as we were. We talked genetics, tried new strains, and kept working to get better. That history and commitment to flower are why we went all in when legalization created a path to build something real.

I never bought the predictions about flower’s decline because I knew what regular cannabis consumers looked like. I was, and still am, one of them. The people I grew up around did not switch to vape cartridges when concentrates hit the market. They were smokers who cared about the strain, the cure, and the way it burned. Those consumers did not disappear when dispensaries opened. They finally had somewhere legal to shop.

Sarah and I do not smoke like we used to. An eighth a day to myself was pretty much standard back in the day. That is not where we are anymore, but flower is still pretty much all that we smoke. Whether rolling our own or grabbing a pack of pre-rolls for convenience, it is what we keep coming back to. You cannot replicate the experience of high-quality flower, and we hear the same thing from most of our friends.

What Flower-First Means in Practice

There is a real and growing market for convenience products and new form factors. We are not ignoring them. But when operators build their entire strategy around the assumption that flower is fading, they risk underinvesting in cultivation quality, cutting corners on genetics, and alienating the regular customers who sustain the category.

To me, a flower-first business strategy means specific things in practice. It means putting serious money into your genetics program instead of licensing whatever strains are trending. It means treating post-harvest handling with the same discipline as the grow itself because a great plant can be ruined in the dry room.

It means being straight with retail partners about what your product actually delivers. It also means resisting the temptation to discount quality simply to chase volume.

None of that means ignoring other delivery systems. We look for ways to carry some of that genetic expression into vapes and concentrates through products such as live resin and rosin. But our legacy, our culture, and our focus have been, and will continue to be, putting great flower first.

That is still the bet we are making. The death of flower has been greatly exaggerated. It was never going anywhere. The people saying otherwise just were not the ones doing the consuming.

Images courtesy of Grown Rogue.

Content Disclaimer: Obie Strickler is CEO and co-founder of Grown Rogue, a multistate cannabis operator whose business includes flower and pre-roll products. This article reflects Strickler’s personal and professional perspective on the cannabis flower market and may align with the commercial interests of Grown Rogue. It was submitted as an unpaid contribution and does not represent independent reporting by High Times.

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“The practical question isn’t whether this is something to celebrate, it’s whether your business is positioned to be a consolidator, an attractive acquisition target or something different.”

By Christopher B. Lynch, Dickinson Wright PLLC

There are a lot of rumors and misinformation out there about what the April 23 federal marijuana rescheduling order means. Some will tell you a story about legalization finally arriving. Others will tell you that not much is changing. But if you look closely, there’s another interesting story emerging: one of careful planning, swift action and targeted consolidation.

Since Acting Attorney General Todd Blanche moved Food and Drug Administration (FDA)-approved and state-licensed medical marijuana products from Schedule I to Schedule III of the Controlled Substances Act, the businesses that I think are best positioned to take advantage of rescheduling aren’t popping champagne—they’re positioning themselves to take advantage of new first-mover opportunities.

That, more than any headline about “federal legalization,” is the real story of rescheduling’s first year: not a national market opening overnight, but a faster, harder sorting of who survives in the one we already have.

NewLake Capital Partners CEO Anthony Coniglio put it well: “Each year brings predictions of a major M&A wave in cannabis. And so far, each year has mostly delivered tuck-in deals rather than transformative consolidation.”

We’re seeing deals that are smaller, more frequent and often faster with less diligence. Two months after Blanche’s order, the Department of Justice opened an expedited administrative hearing to consider rescheduling marijuana in full, including adult-use. That hearing has now concluded, and a recommendation could come at any time.

But for license holders and investors making decisions today, the more immediate question isn’t when the Drug Enforcement Administration (DEA) and DOJ finish the bigger rulemaking. It’s whether their business is built to be an acquirer, an acquisition target or neither, in a race that’s already started.

What the order actually does

The April order reclassified medical marijuana that is FDA-approved or state-licensed, moving it out of Schedule I—reserved for drugs deemed to have no accepted medical use —and into Schedule III, the category for substances with accepted medical use and an abuse potential lower than Schedule I or II drugs. Blanche limited the order to medical products, citing U.S. international drug treaty obligations as the reason adult-use marijuana stayed on Schedule I.

Licensed operators got a 60-day window to opt into a priority DEA registration pathway.

Many took advantage of that pathway, and we’re seeing some of the results: in June, Trulieve restructured to separate its 206 DEA-registered medical dispensaries from its adult-use business and became the first U.S. cannabis company to list on the New York Stock Exchange proof that registration can be a path to markets and resources this industry has been shut out of for a decade.

Tax relief under Section 280E—which prevents deductions for operations that sell Schedule I and II drugs—is the clearest near-term benefit of registration, but there are arguments for federal trademark protection and other prospective benefits.

Where the broader rescheduling case stands today

The bigger question of full rescheduling was the subject of DOJ’s separate administrative hearing, which ran from June 29 through July 15. Final briefs were filed August 19, and Chief Administrative Law Judge Derek C. Julius is now finalizing the record ahead of a recommendation.

That recommendation won’t be law; it goes to DEA Administrator Terrance Cole, who, together with Blanche, will decide whether to issue a final rule. There’s no statutory deadline to rely on, so there could be an update next week or next year—and that’s assuming none of the legal challenges cause further delay.

What began as a single petition challenging the rescheduling move by Smart Approaches to Marijuana has become three consolidated lawsuits in the D.C. Circuit, plus a coalition of doctors, activists and the attorneys general of Indiana and Nebraska (Louisiana has since withdrawn).

And if you need proof that of the value of the opportunities that rescheduling can bring, just look to the claims by MMJ International Holdings, which argues it now faces competitors reaching Schedule III for free after it spent years (and significant capital) pursuing FDA approval the traditional way to get a market advantage.

The plaintiffs in the consolidated lawsuits have asked the court to stay the order while the case proceeds. The DOJ opposed that, and plaintiffs filed their reply on July 17. Two operators, MedPharm Iowa and Tri-Mountain Pure, have since moved to intervene in defense of the order.

A ruling granting a stay could freeze DEA registrations and potentially suspend benefits that operators are banking on.

Why “rescheduled” doesn’t necessarily mean “legalized”

If you operate under a state medical marijuana license, hold dual medical and adult-use authorizations or are evaluating an investment in this industry, treat this moment as the start of a compliance project, not the arrival of a legalized market—we still have many more questions than answers.

State law compounds this, since no two states built their systems alike. The right strategy in Maryland may be wrong in Michigan or Washington, and the ground could shift again fast if the D.C. Circuit grants a stay, or if the ALJ’s recommendation or the eventual final rule reshapes the framework.

Some states could tie state licensure to DEA registration—Oklahoma already has, telling license holders to get DEA registration or risk losing their state permits next year.

Layer on top of all that new DEA regulation of license holders, which could mean on-demand facility access and inspection authority, DEA security requirements, mandatory disclosure of employees’ Social Security numbers and potential exposure for co-located medical and adult-use businesses.

This industry could look very different twelve months from now.

Striving for pole position

Rescheduling alone isn’t going to turn leaden cannabis equities into gold overnight, and I don’t think institutional capital is going to dive into the market immediately—that still requires congressional legislation such as the SAFER Banking Act and operators with the earnings and balance sheets to earn institutional trust.

But in the meantime, rescheduling is drawing interest from pharmaceutical, agricultural and consumer products companies that stayed on the sidelines while marijuana sat on Schedule I and well-positioned operators are already using this window to plan restructurings, seek new partners, acquire distressed assets and target new markets.

This is a genuinely significant moment in the fifty-year history of federal cannabis policy, and one that I think will reward careful, jurisdiction-specific planning and analysis.

The practical question isn’t whether this is something to celebrate, it’s whether your business is positioned to be a consolidator, an attractive acquisition target or something different, and the race for pole position is already underway.

As the smoke clears on rescheduling, start preparing now to take advantage of the opportunity.

Christopher B. Lynch is a Member in Dickinson Wright PLLC’s Seattle office, where he practices in the firm’s Mergers and Acquisitions and Cannabis Law groups.

Photo by Kyle Jaeger.

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“There are products that have not been subject to the same rigorous testing that the medical marijuana requires.”

By Stewart Yerton, Honolulu Civil Beat

It happens all the time now at Oʻahu Dispensary and Provisions in Waikīkī: A prospective customer like Blake Birdwell comes looking for a pre-rolled hemp cigarette or hemp-based edible, only to find the kiosk’s shelves are empty of such goods—by recent order of the Hawaiʻi Department of Health.

“It’s really shitty,” Birdwell said on a recent afternoon after making the rounds at other shops like Natural Mystic, Vape Hawaiʻi and Hawaiʻi’s Cheapest. “They’re all telling me, ‘No.’”

It’s a new reality for people like Birdwell who until recently were able to purchase a range of THC products without a medical marijuana card at dozens of shops across ​​the state—often at a lower price than the products for sale at Hawaiʻi’s officially licensed medical marijuana dispensaries.

The state has now cracked down on sellers of hemp-based products that had been operating under a loophole in federal law, and that’s set up a battle in which Oʻahu Dispensary and Provisions’ owner, Lance Alyas, has asked a federal judge to stop the crackdown.

The suit, which alleges the state has improperly recriminalized federally legal hemp, has gained national attention in legal news reports. The free-market libertarian magazine Reason, which generally opposes government-regulated monopolies, has also weighed in.

It’s the latest iteration of an ongoing struggle to regulate cannabis in Hawaiʻi, which has become widely available for adults to use recreationally in two dozen states.

It’s also a matter of life and death for Alyas’ business, he says, which operates four locations on Oʻahu.

“We have 20 people at risk of losing their jobs,” he said.

Booming Market For Low-THC Hemp Products

Hemp is the same plant species as cannabis sativa—or marijuana—which is a federally controlled substance, though hemp has been historically grown for non-intoxicating uses and contains lower levels of tetrahydrocannabinol or THC. Congress’s 2018 Farm Bill made hemp legal as long as the plants contained no more than 0.3 percent delta-9 THC, the ingredient that gets people high, by weight.

That led to a national flood of products—including gummy candies, vapes, drinks and pre-rolled cigarettes—containing THC derived from federally legal hemp.

In 2020, the Hawaiʻi Legislature passed a law making it legal to grow hemp, but not to produce or sell hemp-based THC products.

Such products proliferated legally on the continent, however, thanks to the 2018 farm bill. By 2024, the hemp-based cannabinoid market had grown to $3.5 billion and was expected to reach $4.4 billion by 2029, the Brightfield Group, a consumer goods research firm reported.

Others, such as Portland-based market researcher Beau Whitney, estimate the market now is actually closer to $30 billion to $44 billion, thanks in part to THC beverages.

Adult beverages containing THC derived from hemp have become so popular and ubiquitous that even Target has begun selling the drinks in hundreds of stores in four states.

Until recently, Hawaiʻi residents could order drinks online, shipped to their door, from brands with names like Willie’s Remedy+, produced by the singer Willie Nelson.

The challenge for Hawaiʻi regulators has been how to deal with such products, which are legal under federal law, coming into the state, where they weren’t supposed to be sold.

‘Premier Pakalolo Provider’ Lobbied For Change

Noa Botanicals is one of Hawaiʻi’s eight licensed medical marijuana dispensaries not subject to the crackdown. Although technically a maker and distributor of medication people can buy only with a doctor’s approval, Noa Botanicals’s marketing looks more like that of a lifestyle brand—not a medical product for patients seeking pain medication.

Its Instagram page, for instance, calls itself “Hawaii’s Premier Pakalolo Provider” and carries the slogan “Find your Hawaiʻi High.” A recent post shows greenhouse workers posing with big marijuana plants above the text “Bud Huntaz out here baggin’ da real trophies.” Other posts feature local music artists HIRIE and Sierra Lucia.

Starting in late 2024, Noa Botanicals’s chief executive, Karlyn Laulusa, began lobbying House Consumer Protection and Commerce Committee Chair Scot Matayoshi (D) and other lawmakers about unlicensed retailers selling hemp-based THC products.

The crux of the problem, as Laulusa described it in emails to lawmakers, was that the licensed, highly regulated dispensaries were losing business to unregulated retailers selling hemp-derived products that were illegal in Hawaiʻi.

The number of unlicensed retailers had boomed from 10 on Oʻahu in 2024 to 74 by early 2025, she wrote, and were taking over the market. Lualusa cited a market analysis from the Department of Health estimating that out of a total annual market of $198 million to $360 million, only $60 million was going to licensed dispensaries. The rest—$138 million to $300 million annually—was going to the unregulated market.

While all of this was happening, buyers were dropping out of the official medical marijuana program. In December 2021, there were 34,125 Hawaiʻi residents with a medical marijuana card, according to the Hawaiʻi Department of Health. DOH’s most recently available report, from the end of last year, shows 28,735 people had cards—a 16 percent decline.

Meanwhile, Laulusa told lawmakers that the Department of Health’s Office of Medical Cannabis Control and Regulation had authority over only the regulated dispensaries. The regulators couldn’t do anything about the unregulated ones.

The result of Laulusa’s lobbying efforts was Act 269 of 2025, which was supported by the Honolulu Police Department and the prosecutor’s office, as well as two other licensed dispensaries, Aloha Green Apothecary and Cure Oahu.

The law, combined with interim administrative rules, gave the health department the ability to require all sellers to register with the agency and open their stores to inspection by cannabis control agents who could tell the retailers what products they needed to remove from their shelves.

As Andrew Goff, chief of DOH’s Office of Medical Cannabis Control and Regulation, describes it, ACT 269 and administrative rules gives the office the ability to enforce existing law. The registration requirement enables the office to know what retailers are selling cannabis products, so the office can let the retailers know what products are allowed and what are not.

Alyas, who obtained the correspondence between Noa Botanicals’s Laulusa and Matayoshi through a public records request, questioned whether lawmakers should be working so closely with industry executives to shape a new law.

Laulusa did not respond to requests for comment.

Matayoshi said it’s part of his job to communicate with industries the state closely regulates and solve problems. Not talking to the regulated industry, he said, would be failing to do due diligence.

“If we’re going to be regulating doctors,” he said, for example, “I think we should be talking to doctors.”

In any case, DOH began enforcing the rules in July, which has led to the situation where people like Birdwell can’t get pre-rolled hemp reefers from places like Oʻahu Dispensary and Provisions.

As president of the Drug Policy Forum of Hawaiʻi, Nikos Leverenz generally supports legalization and regulation of adult-use cannabis. Although he testified against Act 269, Leverenz did say DOH’s enforcement rules can provide a useful framework for regulating sales of cannabis sold to adults—if policymakers legalized such sales outside of medical marijuana dispensaries.

“The DOH has the authority to do what it’s doing now, but I don’t think it’s in the best interest of consumers,” he said. “And it’s certainly not in the interest of businesses outside of the licensed cannabis dispensaries.”

Economic Protectionism Or Consumer Protection?

This echoes one of Alyas’s main complaints: that policymakers are favoring the licensed dispensaries over anyone else, engaging in economic protectionism of a medical cannabis dispensary industry that’s had the benefit of a government-imposed oligopoly for a decade.

When the Legislature established the medical dispensary program in 2015, it limited the number of licenses to eight, with each licensee permitted to operate two retail dispensaries. Over time the Legislature increased the number of dispensaries a licensee can run to four if the licensee can show the location is needed to serve a rural or underserved population.

Alyas questions why, if the market calls for more retail locations, policymakers haven’t simply granted more licenses, rather than letting the same eight businesses, which he calls “the Hateful Eight,” expand operations.

More pointedly, Alyas questions the Department of Health’s 2025 decision to let Noa Botanicals open a new retail location on Royal Hawaiian Avenue under the statutory provision allowing new locations in rural or underserved areas, when there already were two competing licensed shops in Waikīkī.

DOH said there was only one licensed dispensary at the time it approved Noa Botanicals’s request to open its Waikīkī location, and there are now a total of two in Waikīkī.

The medical marijuana control office makes its determinations based on the licensee’s ability to serve and supply patients and an “assessment of the number of registered patients residing in the relevant area in relation to the capacity of the surrounding dispensary locations,” DOH said.

Licensed dispensaries are subject to numerous regulations and are fundamentally different from hemp retail stores, the department said.

Matayoshi, the House Consumer Protection and Commerce Committee chair, says regulation is not simply about protecting the network of dispensaries and affiliated production facilities the state has set up to produce and sell medical marijuana.

It’s also about protecting consumers from untested, hemp-based THC products previously sold by unlicensed retailers.

“There are products that have not been subject to the same rigorous testing that the medical marijuana requires,” he said.

Matayoshi also took issue with the federal government’s carving out low-THC hemp from its schedule of controlled substances, which includes marijuana.

“They try to draw a difference,” he said. “There’s not any. If hemp didn’t have the same effect people wouldn’t buy it.”

Federal Loophole Set To Close

Meanwhile, Alyas’s lawsuit remains alive in Honolulu federal court.

Among other claims, Alyas argues that Hawaiʻi’s law violates the U.S. Constitution’s supremacy clause by criminalizing hemp that Congress legalized. It also challenges the state’s law under a constitutional doctrine known as the “dormant commerce clause,” which limits states’ ability to pass laws interfering with interstate commerce.

Hawaiʻi Attorney General Anne Lopez’s (D) office has countered that the supremacy and dormant commerce clause arguments don’t apply and has asked the court to deny Alyas’s request for a court order preventing the state from enforcing the law.

The issues concerning Hawaiʻi’s low-THC hemp law soon may be moot. In 2025, President Trump signed a bill that redefines hemp, effectively closing the loophole in the farm bill that allowed for the wave of hemp-based THC products to flood the market.

The new measure was supposed to take effect in November, but the Senate passed a bill pushing the deadline back until December.

Beau Whitney, the Portland-based hemp market researcher, has been following Congress’s movements closely. He said the new hemp definition threatens the whole industry and could have unintended consequences for industrial hemp.

While some in Congress, including U.S. Sen. Rand Paul, have been pushing back, Whitney isn’t counting on those efforts to do anything, although he said, “There might be a diving catch.”

This story was first published by Honolulu Civil Beat.

Photo courtesy of Brian Shamblen.

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Traditional business consulting is well-suited to traditional businesses. After all, they’ve evolved hand in hand for more than a century. Heavily regulated cannabis, however, is another story.

Launching a cannabis business and keeping it primed for growth quickly can prove overwhelming. There are so many crucial systems to sort—supply chain logistics, manufacturing standard operating procedures, inventory management, human resources, payroll—and so little time to figure out what works best.

Mainstream business consultants have developed a one-size-fits-all structure that covers the basics, but cannabis consulting requires a more holistic approach to business operations. The industry has a uniquely wide variety of different regulations from state to state, not to mention an ever-growing number of business services on offer.

It’s no secret businesses are willing to invest a lot of money in consultancies. The field generated about $132 billion worldwide in 2020 alone. This is because of a symbiotic relationship that has gradually developed between consultants and business executives since the nineteenth century, when scientific principles of ordered structure (think divisions and subdivisions) were first applied to business-management practices.

Over time, traditional business consulting became highly siloed, thanks in part to financial regulations put in place after the Great Depression and in part due to a mid-century shift away from recommending specific structures in favor of detailed strategies for every aspect of a business. Today, business consulting typically adds value for executives by giving them access to very specific knowledge and research.

In young, rapidly developing industries, however, founders may get the most benefit from a specialty-agnostic consultant. A holistic, results-based approach to business consulting links leadership to a wide variety of solutions that can be tailored to each company, saving both time and money.

What does holistic consulting mean? It means understanding the big picture. Cannabis regulations are extremely granular and varied between states, and businesses, particularly multistate operators, likewise vary in both structure and strategy.

For example, take the wildly different regulatory landscapes that exist in an established cannabis market like Washington state, which prohibits vertical integration of cultivation, processing, and retail operations, versus a newer market like New Mexico, where businesses holding a vertical-integration license have additional allowances such as the ability to seek a courier license.

Companies face a very different set of challenges and opportunities depending on whether they operate in medical and/or recreational markets. Even different business models present diverse considerations. Regulatory programs impact how much a company controls its supply chain or has the ability to branch into delivery services, for example, creating different day-to-day operations and company structures.

A truly agnostic consultancy familiar with which services and solutions are available in each region will offer more value than a consultant limited to a particular framework or limited stable of vendors. A more versatile approach also allows consultants to make room for the nuances of the industry, acknowledging how fast regulations can change and trends like delivery can take hold.

Another reason founders would be wise to seek out consultants with a results-based approach is to protect their balance sheets. New businesses require a wide range of services and technology solutions through startup and expansion, and these quickly can accrue up a lot of billable hours—particularly when you factor in the bespoke nature of the consulting work involved.

A consultancy that bases its billing on results (or charges vendors instead of the consulting client) can help nascent companies conserve investment dollars as they navigate licensing hurdles and rapid industry pivots. Results-based billing also incentivizes the service provider to offer an effective, top-quality product and promotes long-term success versus a short-term project based on billable hours.

Together, agnosticism and results-based billing structures add up to greater efficiency. In an industry capable of generating huge profits but still vulnerable to fluctuations in wholesale flower prices, heavy taxation, supply gluts, and competition from the illicit market, that efficiency is good news for the bottom line.

Traditional consulting may indeed be an adequate fit for more established business sectors where solutions are more universally transferable, but too many cannabis founders have found themselves playing the telephone game with multiple consultants, spending precious hours evaluating dozens of different service options from accounting to HR to point-of-sale. It’s time to disrupt the structure and strategy of consulting itself for a more holistic, results-based philosophy.

Brian Mayfield and Adam Benko are cofounders of MJstack, a software-as-a-service and operations consultancy that combines institutional knowledge of mature and emerging markets with enterprise expertise. The company helps entrepreneurs avoid regulatory pitfalls and operational headaches so they can focus on growing their business.

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Social media messages supporting Black, Indigenous, and people of color (BIPOC) communities and causes are not difficult to find. But social media support is no substitute for real-world action in areas including meaningful investment, partnerships, and marketing programs. Cannabis industry activists who monitor the progress of social equity programs in the public and private spheres are frustrated and disappointed by the progress—or lack thereof—in an industry expected to generate $30 billion in sales next year. A more diverse community should be able to access that pie.

One of the first groups to help nudge cannabis companies in the right direction is Cannaclusive, a team of marketing and business consultants that has spent the past five years promoting and facilitating fair representation of minority cannabis consumers. Co-founder Mary Pryor is one of many operators and activists who are unimpressed with what they’ve seen in an industry that talks a big game about social equity and inclusivity but fails to follow through.

“No company is really making a big difference,” she said. “People are doing stuff, but is it really groundbreaking in a way that’s providing access no one’s ever seen before? No. Is there room for improvement? Absolutely. There are programs that are happening, that are doing small things with corporations, but they’re not making the change you think they’re making based on their press releases.”

Defining inclusion

One of the most fundamental services Cannaclusive provides to its clients is defining what inclusivity and diversity actually mean in the context of running a cannabis company. When Pryor meets with prospective clients, she first tries to explain how and why incorporating the concepts into their brands can be advantageous for the company’s culture, employees, and customers.

“I try to break things down so people understand how it all goes together,” she said. “I coach people through that reality, but pretty often people are thinking, ‘I’m scared and I don’t understand why we need to think about this.’ There are a lot of reasons why people realize they should reach out to us, and when it comes down to the bottom line, companies should understand inclusivity is good for business in America.”

When Pryor explains high-level marketing and media concepts, she certainly knows what she’s talking about. Over the course of her career, she has been a marketing consultant in fields as disparate as automotive design, electrical engineering, and music, advising companies including Sony Music Group, Viacom, CBS News, Ebony Magazine, The Rolling Stones, and VaynerMedia.

“People need to understand the value in buying and consuming with brands that actually care about what you have and what you’re doing as a melanated person and actually speak to that and show an interest in it,” she said. “We want to give creatives more ways to connect to each other with a new tool that we will be announcing very soon. We are also going to stay focused on accountability and remind people to care about an inclusive future, keeping in mind this doesn’t just happen through paintings and murals on the street.”

Cannaclusive has taken a multifaceted approach with its projects and services in order to convey the full scope of what it means to be inclusive. One of the organization’s early projects was to create a photo archive that other companies can use for free (with credit) to promote Black and Brown people in their cannabis marketing and advertising efforts.

The group also has an “accountability list” on its website that documents and archives statements of support for social equity, as well as what individuals and companies have done to make good on their pledges. Also on the website: the organization’s “InclusiveBase,” a resource that helps consumers locate BIPOC-owned cannabis businesses so they can support minority-owned groups as they travel from state to state. The list currently contains more than 900 companies across the U.S.

Black consumers in the cannabis industry account for more than $1 billion in annual spending, Pryor explained, so winning their trust and business should be a high priority for any company. Within her own organization, she also wants to ensure people’s work is rewarded properly. “One of the things we’re realizing is the evolution of being better not only means creating new revenues of income for clients, but also providing equity and ownership to all the members of the collective that have been donating way more time to caring about advocacy than anybody else,” she said. “If we’re going to get people to wake up to why this matters, it’s going to take the idea of building out an inclusive future.”

Case study

Cannabis beverage company Cann, launched in 2019, has built a successful relationship with Cannaclusive. When crafting the company’s marketing message, cofounder Luke Anderson contacted Cannaclusive to gain a deeper understanding of the issues the BIPOC community faces on a societal level and the challenges of operating in a business environment that historically has been dominated by white men.

With advice and guidance from Cannaclusive, Cann developed twenty pieces of Instagram content that were “an interruption from our silent tone of voice and aesthetic to make space for education and amplification of Black and Brown voices,” said Anderson. “It started as something that really surprised and confused our audience, because it was a majority white audience. Over the course of a year, these posts became more and more popular, and we are referenced in the press as one of the few cannabis brands that is actually saying somewhat coherent things about these issues other brands choose to ignore.”

Anderson said Cann’s relationship with Cannaclusive has opened doors to new business partnerships and, perhaps more importantly, a whole new group of consumers in communities of color. “We’ve gone from having a hyper-white following to having a much more diverse one,” he said. “So I think that’s one piece of it, just social media diversification of storytelling. Under Cannaclusive’s guidance, we made some more thoughtful partnerships that raise our brand equity with a lot of different communities that would not normally be interested in what we say. So we have broadened our reach and activated campaigns through their networks.”

To build a relationship with social equity and nonprofit organizations, Cann recently donated more than $100,000 to groups handpicked by Pryor, and the company plans to strengthen those relationships moving forward.

“Having a brand that resonates with people comes from having a strategy where there’s a degree of inclusion as part of the marketing strategy. But I don’t really see that in cannabis,” Pryor said. “When people start realizing it and they get it, like Cann, it actually changes their profitability.”

Anderson agreed Cannaclusive’s guidance has boosted Cann’s bottom line. “It’s not a coincidence that our sales have quadrupled from Q2 2020 to Q2 2021, because now we are reaching more people and building a brand that means something more,” he said.

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