“If licensed adult-use retailers disappear, consumers will continue to seek cannabis through other channels… None of the alternatives will produce the safe and regulatory tested products, jobs and tax revenue the current legal market generates.”

By Steve Reilly, Insa

If you are a Massachusetts voter who has not been following the debate over cannabis policy, Question 8 on this November’s ballot deserves your attention.

The measure asks voters whether Massachusetts should repeal the laws that allow and regulate adult-use cannabis sales. The implications go well beyond whether a dispensary remains open. The question reaches the system of licensed businesses, product testing, taxation and regulatory oversight that Massachusetts has built over the past decade—seeking to eliminate 27,000 jobs and $300,000,000 in tax revenue that will need to be made up somewhere else.

Understanding what is actually being proposed and what would replace the current system is essential before casting a ballot.

Massachusetts voters approved adult-use marijuana legalization in 2016. Since then, the commonwealth has developed a regulated market overseen by the Cannabis Control Commission (CCC), with licensed cultivators, manufacturers, retailers and testing laboratories operating under regulated state rules. Although there have been documented issues with regulatory oversight, the legislature recently took action to make improvements, and the ballot question could ultimately undermine that progress rather than build on it.

Question 8—formally titled “An Act to Restore a Sensible Marijuana Policy”—would repeal the state laws governing the possession, distribution, cultivation and taxation of adult-use marijuana. While the medical market would remain legal and adults 21 and older would still be permitted to possess up to one ounce without civil or criminal penalties, possession of more than one ounce and up to two ounces would carry a civil penalty.

The effect would be to penalize possession over an ounce, while keeping lesser amounts fully legal but eliminating the commercial dispensaries where product can be purchased. The practical effect will be to sow confusion and chaos with regards to what cannabis you can possess and where you can obtain it, likely pushing consumers into the illicit market. This is intentional by those brining the initiative who hope to diminish public support.

A “yes” vote is not simply a vote to change cannabis regulations or impose new restrictions on dispensaries. It would eliminate the existing adult-use retail system.

So what does that mean for consumers?

Today, an adult-use consumer can enter a licensed Massachusetts cannabis retailer and purchase products that are subject to state requirements for testing, labeling, packaging, security and business oversight. The regulated system also establishes rules around who can sell cannabis and where it can be sold.

If Question 8 passes, that licensed adult-use retail structure would go away, giving way to an unregulated market where these products continue to be legal to possess and use. The practical question for consumers is not whether cannabis possession remains legal, rather it is whether Massachusetts will continue providing a commercially regulated, licensed place for adults to purchase cannabis products.

That raises important public-safety questions.

There is also an economic consequence. Since legalization, Massachusetts’s adult-use cannabis market has generated more than $10 billion in cumulative sales, including approximately $1.65 billion in 2025 alone. In 2025, the cannabis industry generated approximately $308 million in state revenue and another $51 million in local-option tax revenue for municipalities that supports cultivation and manufacturing employees, laboratory workers, security companies, construction and real estate businesses, technology providers, professional services and other vendors.

Eliminating the adult-use licensing and taxation framework would fundamentally alter the businesses and public revenues that have developed around it.

One of the central arguments for legalization was that a regulated marketplace could provide adults with an alternative to an illicit market. But if licensed adult-use retailers disappear, consumers will continue to seek cannabis through other channels. Whether that means medical dispensaries, personal cultivation, transfers between adults or illicit sellers will depend on how the market responds.

None of the alternatives will produce the safe and regulatory tested products, jobs and tax revenue the current legal market generates.

As a registered voter, the choice on Question 8 is consequential. Question 8 represents a decision between maintaining a regulated adult-use marketplace that has existed for nearly a decade and moving Massachusetts toward a different model in which marijuana remains legal but unregulated.

As voters consider the question, they should look beyond campaign slogans and understand exactly what the initiative would change, what protections would remain, what would disappear and how those changes could affect consumers, communities, employees and businesses.

Cannabis policy should ultimately be about public safety, responsible access, accountability and informed consumer choice, not an unregulated free-for-all market. Whatever position a voter takes on Question 8, that decision should begin with a clear understanding of what is actually on the ballot. More information is available at at stoptherepealma.com.

Steve Reilly is head of government relations for Insa, a cannabis company that operates in Massachusetts and other states.

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“2028 sounds far away. But artwork gets locked with the printer weeks or months before the run. Then the boxes sit in a warehouse until they are used.”

By Adrian A. Holguin, CannaShark Consulting

Last month, California Gov. Gavin Newsom (D) signed AB 2249, a bill that puts a much clearer line around what cannabis packaging, labels and ads can look like. The short version: no child-oriented dragons, unicorns or wizards; nobody who looks under 21; no imagery of candy, cereal, sweets or desserts primarily marketed to children; no child-style bubble or balloon lettering; and no packaging that mimics a noncannabis product marketed to kids.

The new definition takes effect on January 1, 2028.

Most of the coverage stopped there, and I get it. “Rules take effect in sixteen months” doesn’t make anyone spill their coffee. But operators tend to call me after a rule costs more than they expected, so here’s why 2028 is not the date that matters.

First, the basics.

California has banned cannabis packaging that is “attractive to children” since legal sales began, and cartoons on labels are already prohibited. The problem was that the line remained subjective and was applied inconsistently. A 2025 state audit found that Department of Cannabis Control (DCC) rules were not specific enough and that reasonable reviewers sometimes reached different conclusions about similar packaging.

AB 2249 draws a clearer line. It defines “attractive to children” as designed or likely to appeal to anyone under 21, then identifies cartoons; depictions of people under 21; celebrities, influencers, characters and mascots primarily associated with contemporary children’s media or products; fantasy characters such as unicorns, wizards and dragons; imagery of candy, cereal, sweets and desserts primarily marketed to children; child-oriented bubble or balloon lettering; and packaging that mimics a noncannabis product marketed to children.

Cartoon or overly stylized fruit on an edible or vape label is out. A realistic depiction of fruit that accurately reflects an ingredient or production region is allowed.

The bill also authorizes DCC to adopt additional rules for design elements or product characteristics that pose a heightened risk to children, and it requires the department to develop self-assessment resources.

DCC launched its AI-based Cannabis Product Image Analyzer in June. Use it as a screening tool, not a safe harbor: an automated result is advisory, not a final DCC determination.

AB 2249 sets no deadline for additional rulemaking or for the required resources, so operators are still designing against a target that could move.

Now here’s the part that got underplayed.

Packaging isn’t bought like office supplies. Many brands buy it in runs representing six months to a year of inventory because that is how they protect unit economics. Artwork gets locked with the printer weeks or months before the run. Then the boxes sit in a warehouse until they are used.

So play it forward. A brand placing a normal-sized packaging order in early 2027 may be buying stock it expects to use well into 2028. AB 2249 contains no express sell-through safe harbor for old packaging.

Unless DCC issues contrary guidance, the prudent plan is to assume that product offered for sale on January 1, 2028 must comply with the new definition. That may put the artwork deadline in late 2026. In other words, somebody has to decide now whether the mascot stays.

The California Cannabis Industry Association opposed the bill on cost, and that concern is real. A redesign can mean compliance review, new plates, minimum order quantities, retailer notifications and eventually paying someone to destroy old packaging. But the final Senate vote was 38-0, and the Assembly concurred 69-1.

The cost is now a scheduling problem, and scheduling problems are only cheap if you start early.

Handled on the front end, this is a calendar and a manageable cost. Handled on the back end, it becomes destroyed inventory, retailer disruption, potential enforcement and a bill with more zeros. The difference is almost never information. Operators knew the rule was coming. The problem is that “2028” sounds far away.

If you hold a California license, this quarter looks like this: pull every SKU and flag anything with a character, creature, candy cue, child-oriented lettering or stylized fruit. If you have to argue about whether the gummy bear is a cartoon, it probably is.

Get your printer’s real lead times in writing and work backward from January 1, 2028. Start the redesign conservatively, have the final art reviewed, and run it through DCC’s tool as a screen before the plates are cut. Then size your last old-look order to sell through before 2028.

Nobody should build a compliance plan around the hope that the state will be generous with a pallet of dragon gummies.

The state gave you sixteen months. Your printer gave you about six. Plan around the printer.

Adrian A. Holguin, J.D., M.B.A., is founder and president of CannaShark Consulting. He advises cannabis operators and businesses in other highly regulated industries on licensing, compliance, finance and operations, and also serves as an expert witness.

Photo courtesy of Max Pixel.

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“Rhode Island has already chosen to regulate hemp rather than prohibit it. Our next attorney general should explain whether they intend to defend that decision.”

By Mike Simpson, Lovewell Farms via Rhode Island Current

Last October, Rhode Island Attorney General Peter Neronha (D) joined 38 other state attorneys general in signing a letter urging Congress to change the federal definition of hemp. On August 4, Neronha signed another multistate letter, this time urging Congress to reject any effort to “delay, repeal, suspend, or weaken” hemp restrictions enacted in November 2025.

I have now written twice in the last year about the problems with this federal policy and its consequences for Rhode Island farmers and small businesses. I write as the co-founder of Lovewell Farms, Rhode Island’s only USDA-certified organic hemp farm, founded in 2018. I write this with nearly 20 years experience in cannabis and drug policy. Lovewell Farms supports strong regulation of hemp products, including testing, reasonable potency limits, child-resistant packaging, accurate labeling and restrictions on sales to minors.

What we do not support is describing Rhode Island’s regulated hemp industry as something that is harmful.

That was one of the central problems with the October 2025 attorneys general letter. It described a national hemp market in which products are sold “without consistent age restrictions, labeling standards, or safety requirements,” while discussing gummies and beverages marketed to children and synthetic cannabinoids produced through chemical conversion.

Those concerns may be legitimate in states that have failed to regulate hemp products. They do not accurately describe Rhode Island. Neronha signing this letter made it appear he agreed with these claims, and that they were reflective of our state’s program.

But Rhode Island has a state-regulated hemp program. Businesses like mine operate under state licenses and are subject to the exact same requirements governing testing, potency, labeling, packaging and age restrictions as the state’s medicinal cannabis program. The state has also placed specific limits on THC in consumable hemp products.

There is certainly room to debate whether those regulations should change, but it is simply inaccurate to describe Rhode Island’s hemp market as unregulated and unsafe.

This distinction became particularly important after Congress enacted a new federal definition of hemp last November. Rhode Island Sens. Jack Reed (D) and Sheldon Whitehouse (D) both opposed an amendment that would have removed the hemp provision, and their offices subsequently told Rhode Island Current that they did so “at the urging of the vast majority of the state attorneys general.”

Neronha’s participation in the October letter therefore had consequences beyond Rhode Island. It provided the justification for a congressional vote that now threatens farmers nationwide.

This August letter is more troubling after the U.S. House of Representatives on Tuesday passed legislation that would give farmers another month before the new definition takes effect.

The provision is part of a short-term government funding bill to avoid a federal shutdown this fall. It keeps the federal government funded through December 11 and was already approved by the Senate in early August. If signed into law by President Donald Trump, the effective date of the hemp product ban would also be moved to December 11.

Rather than support that effort, Neronha joined other attorneys general in asking Congress to reject any delay or modification.

The problem remains that the federal definition is much broader than the synthetic and highly intoxicating products discussed throughout both letters. The August letter itself acknowledges that the new law excludes final hemp-derived cannabinoid products containing more than 0.4 milligrams of total THC per container.

That threshold does not merely eliminate synthetic delta-8 products or high-potency THC gummies. It threatens ordinary, naturally extracted, full-spectrum CBD products containing trace amounts of THC like those manufactured on our farm.

This is important for farmers like me. CBD-rich hemp flower plants naturally produce small amounts of THC. Full-spectrum extracts preserve most of the natural cannabinoids in the plant. Our products can therefore be non-intoxicating, produced without chemical conversion, and compliant with state law, all while containing more than 0.4 milligrams of THC per package.

The August letter nevertheless states that the new definition will preserve “safe, nonintoxicating hemp products” and “will not inhibit the cultivation of hemp.” For cannabinoid hemp farmers, those assertions deserve considerably more scrutiny.

Congress should be able to prohibit synthetic intoxicants or establish reasonable national standards without defining naturally occurring, non-intoxicating full-spectrum CBD products out of existence.

AG candidates: Please answer the following

This issue now has particular relevance in Rhode Island because Neronha is term-limited. The state will elect a new attorney general this year, and that person will inherit the authority to sign letters like these on Rhode Island’s behalf.

The candidates for attorney general should therefore explain their positions on hemp before the primary election.

• Do you support Rhode Island’s existing regulated hemp industry?
• Do you believe naturally occurring full-spectrum CBD products should remain legal?
• Do you support the federal 0.4-milligram-per-container standard, even when it prohibits non-intoxicating products that are legal under state law?
• Do you support distinguishing those products from chemically converted intoxicating cannabinoids?
• Will you consult Rhode Island regulators, farmers and licensed businesses before signing national policy letters that make factual claims about our state?

When an attorney general signs such a letter, the signature carries the authority of the state. As the congressional response to the October letter demonstrated, those signatures can influence federal policy. The August letter suggests that there is still a substantial disconnect between the national hemp debate and the businesses operating under Rhode Island law.

The next attorney general has an opportunity to approach this differently. Rhode Island does not need someone who automatically agrees with the hemp industry, nor should the industry be exempt from scrutiny. We need an attorney general who understands the laws already in place and distinguishes between regulated and unregulated markets, intoxicating and non-intoxicating products and synthetic cannabinoids and the naturally occurring compounds found in a legal agricultural crop.

Rhode Island has already chosen to regulate hemp rather than prohibit it. Our next attorney general should explain whether they intend to defend that decision, or abandon it.

Mike Simpson is the co-founder of Lovewell Farms, Rhode Island’s only U.S. Department of Agriculture (USDA) organic hemp farm. He is also a historian, educator and longtime advocate for policy reform. He was previously deputy director for Regulate Rhode Island and an initiative coordinator for Marijuana Policy Project in Maine. He now lives in Providence and farms in the village of Hope Valley in Hopkinton.

This story was first published by Rhode Island Current.

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“Diagnoses are sometimes entered into medical records without…meaningful consideration of medically authorized cannabis use.”

By Etienne Fontan, Veterans Action Council

The 2013 release of the Diagnostic and Statistical Manual of Mental Disorders (DSM-5) introduced cannabis use disorder (CUD) as a new diagnosis, replacing the DSM-4 categories of Cannabis Abuse and Cannabis Dependence with a single, severity-based unified diagnosis.

This change was framed as a modernization of psychiatric classification, but it has had significant implications within systems such as the Veterans Health Administration (VHA) under the U.S. Department of Veterans Affairs (VA).

In Part 4 of our series on veterans’ cannabis issues that are illuminated by the Veterans Action Council’s (VAC) Freedom of Information Act (FOIA) request, we turn our focus toward a problem affecting many veterans: the improper diagnosis of CUD within VHA.

CUD is defined as a pattern of cannabis use that causes clinically significant impairment or distress, assessed through criteria including impaired control, cravings, continued use despite harm, tolerance and withdrawal. The DSM-5 places these criteria on a continuum, classifying severity as mild, moderate or severe according to the number of criteria met.

However, the decision by the American Psychiatric Association (APA) to merge cannabis abuse and dependence into a single diagnosis did more than streamline terminology. It fundamentally altered the threshold and breadth of diagnosis.

Under DSM-IV, abuse and dependence were distinct conditions with different clinical implications. Abuse generally referred to problematic patterns of use with social or legal consequences, while dependence suggested a more entrenched physiological and behavioral pattern.

By collapsing these into one category, DSM-5 widened the diagnostic net, capturing a broader range of individuals under a single label.

This shift was driven by concerns about inconsistency. Researchers and clinicians had long observed that the boundary between abuse and dependence was not always clear and that patients often moved between categories. DSM-5 sought to resolve this by treating substance use as a spectrum.

In theory, this improved diagnostic reliability and aligned cannabis with other substance use disorders. In practice, however, it also created circumstances in which individuals who previously would not have received a diagnosis or would have received a less severe diagnosis could now be classified as having a disorder.

This distinction is not merely academic. A diagnosis carries weight. It shapes treatment decisions, becomes part of a patient’s permanent medical record and influences how future providers interpret that patient’s history.

Within the VHA system, the broader definition of CUD has intersected with institutional practices in ways that many veterans and advocates find troubling.

Reports have surfaced describing situations in which a positive THC test, often obtained through routine screening, is followed by the assignment of a CUD diagnosis without a comprehensive clinical evaluation.

Such practices raise an important question: Is CUD always being applied as a carefully considered medical diagnosis, or has it, in some cases, become an administrative label? In a proper clinical setting, diagnosis should follow a thorough assessment that considers symptoms, context, medical history and the patient’s own explanation of their cannabis use.

It should involve a conversation in which the patient understands the criteria being applied and has an opportunity to explain whether their cannabis use is therapeutic, medically supervised or otherwise clinically appropriate.

Yet many veterans report that this process is not consistently followed. Diagnoses are sometimes entered into medical records without prior discussion, without documentation of a structured DSM-5 assessment and without meaningful consideration of medically authorized cannabis use.

This gap between diagnostic standards and real-world application undermines the principles DSM-5 was intended to advance. When patients use cannabis daily under state medical cannabis laws to manage chronic pain, PTSD or other conditions, they may satisfy certain DSM criteria despite experiencing improved functioning rather than impairment.

Cannabis occupies a uniquely complex position within American healthcare. Although it remains federally prohibited, it is legal for medical use in many states and is widely used by veterans seeking alternatives to opioids or other medications.

The DSM-5 framework does not explicitly distinguish therapeutic cannabis use from problematic use. As a result, individuals using cannabis as physician-guided symptom management may nevertheless fall within a diagnostic framework originally intended to identify psychiatric illness.

The consolidation of abuse and dependence into a single diagnosis has also contributed to what many describe as diagnostic inflation. When criteria are broadened and applied without careful clinical judgment, prevalence rates may increase—not necessarily because more patients have a true disorder, but because more individuals satisfy an expanded definition.

In large systems such as VHA—where diagnostic coding serves administrative, research and reporting functions—this creates the risk that consistency may take precedence over individualized assessment.

The role of institutions cannot be overlooked. The APA establishes diagnostic criteria, but organizations such as the VHA operationalize those criteria on a national scale. Their implementation determines how these definitions affect veterans’ lives.

The increasing emphasis on CUD within the VHA system has coincided with expanded drug screening practices and a historically cautious institutional approach toward cannabis. What has not kept pace, however, is the rapid evolution of scientific research examining both the potential therapeutic benefits and the limitations of medical cannabis.

None of this is to suggest that CUD is not a legitimate diagnosis. For some individuals, cannabis use becomes harmful and requires clinical intervention. The concern is not the diagnosis itself, but proportionality, accuracy and adherence to accepted diagnostic standards.

Additional Evidence From VAC FOIA Records

Internal VA records obtained through the VAC’s FOIA request raise important questions about how VHA applies CUD. In 2022, VA correspondence reported 134,790 veterans with cannabis-positive urine drug screens and 139,336 veterans identified as having CUD. While these figures alone do not prove improper diagnoses, they warrant scrutiny when compared with national epidemiologic data.

Research cited within the same FOIA records from the National Epidemiologic Survey on Alcohol and Related Conditions (NESARC-III) found that 7.3 percent of U.S. veterans reported cannabis use in the previous year, but only 1.8 percent met DSM criteria for CUD. This suggests that only a minority of cannabis users meet the diagnostic threshold and underscores the need for individualized clinical assessments rather than reliance on cannabis use alone.

The FOIA records also reveal that VA officials recognized the complexity of the issue.

In one email, VA Office of Research and Development Media Branch Chief Bruce I. Friedland acknowledged the need to “thread a needle” between addressing genuine cannabis-related substance use disorders and supporting research into cannabis as a potential therapeutic treatment.

In another email, Friedland sought guidance because VA lacked cannabis-specific resources for veterans who believed they had developed cannabis dependence.

Additional correspondence from UCSF physician Dr. Salomeh Keyhani recommended that veterans identified through urine drug screening be individually assessed for high-risk cannabis use and offered treatment when appropriate, consistent with the DSM-5 requirement for a comprehensive clinical evaluation rather than diagnosis based solely on laboratory findings.

VA research contained in the FOIA materials also found that nearly one third of reviewed patient records contained no documented discussion of cannabis between providers and patients. Of those that did, nearly half involved medical cannabis use rather than discussions of risks or harm reduction.

These findings reinforce the importance of patient-provider dialogue and individualized clinical judgment before assigning a psychiatric diagnosis.

For veterans managing complex medical conditions, inaccurate psychiatric diagnoses can affect treatment decisions, disability evaluations, provider perceptions and confidence in the medical record. Restoring integrity to CUD diagnosis requires rigorous application of DSM-5 criteria, informed patient participation, consideration of therapeutic cannabis use and periodic review of institutional practices to ensure administrative efficiency never replaces sound clinical judgment.

A diagnosis should ultimately serve the patient by guiding treatment and accurately reflecting clinical reality. The value of DSM-5 depends not only on how its criteria are written, but on how faithfully they are applied.

Etienne Fontan is a U.S. Army Desert Storm combat veteran and co-owner of Berkeley Patients Group, one of the nation’s longest-operating medical cannabis dispensaries. He serves on the Veterans Action Council, where he works on veterans’ access to cannabis, federal policy reform and international drug policy issues.

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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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“Cannabis companies should consider various pitfalls to ensure not only legal compliance, but to maximize potential benefits.”

By Meeren Amin, William Bogot and Douglas W. Charnas, Fox Rothschild LLP

With rescheduling of medicinal marijuana and potential relief coming for recreational use, cannabis companies should be aware of tax benefits available to the industry.

One such incentive for companies not subject to Internal Revenue Code (IRC) § 280E—which blocks tax benefits to entities that sell Schedule I and II substances—is the IRC § 41 R&D (research and development) tax credit. The R&D tax credit provides a dollar-for-dollar reduction of tax owed for qualifying companies. It is not industry specific and can be claimed by a qualifying company in any sector, including cannabis.

The R&D tax credit was enacted in 1981 to incentivize U.S. companies to increase R&D activity. For years the credit was extended temporarily by Congress at the end of each calendar year. However, in 2015, Congress made it permanent. And then in 2025, lawmakers breathed even more life into the credit by eliminating the requirement that R&D expenditures be amortized over a five-year period.

Now, with IRC § 280E on the chopping block as cannabis moves toward Schedule III status, certain companies in the industry can claim the credit that others have taken advantage of for years. Having said that, careful planning is required when considering the R&D tax credit.

Cannabis companies should consider various pitfalls to ensure not only legal compliance, but to maximize potential benefits.

Pitfall #1: Thinking you don’t qualify for the credit because you don’t do research in a laboratory.

The R&D tax credit is not industry specific. Instead, to qualify for the credit, a company must meet each part of a four-part test:

1. A company needs to develop a new or improved product, process, software, technique, formula or invention. Practically, this means that many cannabis companies can qualify by developing a new or improved product.
2. The research needs to eliminate uncertainty about a product’s capability, method or appropriate design. Often, research will qualify by means of having uncertainty as to a product’s ultimate design.
3. The research must involve a process of experimentation. This does not need to be in a laboratory, but instead simply requires evaluating alternatives through system trial and error.
4. The research must be technological in nature, in that it requires the use of principles of hard science.

This formulaic approach to determining qualification for the credit allows companies in many industries—from pharmaceutical companies to architectural firms—to claim the R&D tax credit. Cannabis companies involved in breeding, cultivation, growing, extraction and product development could potentially qualify for the credit if they meet the four-part test and do not fall under any applicable exclusions.

Pitfall #2: Not maintaining proper records of research activities and expenditures.

The Internal Revenue Service (IRS) commonly attacks R&D credit claims for a lack of substantiation. Taxpayers have the burden to prove they are entitled to the credit, so they must adequately substantiate their claims.

Cannabis companies that qualify can claim the tax credit on qualified wages or supply costs. However, companies must have evidence of wages and supply costs to claim the R&D tax credit.

Evidence of supply costs includes receipts of goods and logs showing how supplies are used in the research process. Since supplies that are later sold to customers would not qualify for the credit, cannabis companies need to track how research supplies are used.

Evidence of wages usually requires detailed activity logs. Most small and mid-sized operators do not require employees to keep a log of activities, but to be able to withstand IRS scrutiny, companies should require employees involved in research to track their time using a consistent methodology.

Maintaining detailed records or R&D activities is difficult for rapidly growing businesses. While granular level records may not be necessary, it is important for cannabis companies to consult with their tax advisors on the level of detail needed and how to implement tracking systems.

Pitfall #3: Relying on unscrupulous or shady promoters of R&D tax credits.

The R&D tax credit is complicated and can be overwhelming. There are a number of reliable firms that can determine qualification, draft a study and calculate the credit. Unfortunately, there are a large number of firms that do not perform the necessary due diligence and are not credible. These firms sometimes charge large contingency fees and make guarantees about eligibility. Their calculations are often greatly overstated for the purpose of generating high fees. These firms may seem credible but can be overly aggressive in their approach.

With the emergence of the cannabis companies as potential new credit claimants, these companies will likely be aggressive in their pitch. However, poor work on the front end can lead to adverse determinations by the IRS.

Cannabis companies need to properly vet the firms they hire to conduct R&D studies and then have those studies reviewed by a third party. Credit experts can analyze the work done by firms to help strengthen the front-end studies. Companies that are not careful face the risk of losing the credit, while also owing promoters huge fees.

Pitfall #4: Not separating non-IRC § 280E and IRC § 280E activities.

As of now, only state-licensed medical marijuana is not subject to IRC § 280E and thus eligible for the R&D tax credit. That means research related to recreational use marijuana is not eligible for the R&D tax credit.

This makes it difficult for most eligible companies who are involved in both medicinal and recreational uses, as they need to separate their research activities relating to the two. This may be almost impossible for vertically integrated companies. But other companies can use entity structuring to help allocate costs and ensure segregation of qualifying and non-qualifying research activities.

The R&D tax credit is a very powerful incentive that certain cannabis companies can now claim. However, it is a major area of focus for the IRS due to the complexity of the credit and the aggressive positions pushed by certain promoters. While this may cause concern to companies seeking to claim the credit, careful due diligence and reliance on advisors can help businesses ensure that their credit claims are well supported.

Meeren Amin is a partner in the Taxation & Wealth Planning Department at Fox Rothschild. William Bogot is co-chair of the Cannabis Law Practice at Fox Rothschild. Douglas W. Charnas is counsel in the Taxation & Wealth Planning Department at Fox Rothschild.

Photo courtesy of National Institute of Standards and Technology.

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“Because marijuana use remains illegal under federal law, standard supervision conditions may prohibit consumption.”

By Sephria Reynolds-Tanner, Reason Foundation

Medical marijuana is legal in 47 states, the District of Columbia and three U.S. territories. Yet for millions of Americans on probation or parole suffering from qualifying conditions like chronic pain, post-traumatic stress disorder and anxiety, that legalization is worth very little in practice. In many states, people on probation and parole are forbidden to use medical marijuana, even when legally recommended by a physician.

It’s an oversight that state lawmakers need to address.

Nearly four million adults in the United States are on probation or parole, almost double the number of people held in jails and prisons combined. Because marijuana use remains illegal under federal law, standard supervision conditions may prohibit consumption. A positive drug test can trigger a violation of probation or parole and result in jail or prison time.

In 2023, states collectively spent an estimated $3 billion re-incarcerating people for “technical violations,” such as missing a check-in appointment or failing a drug test. The exact share attributable to marijuana-related test failures is unknown because agencies do not collect substance-specific violation data. But, because marijuana is the most commonly used controlled substance and remains detectable in urine for up to 30 days, that share is likely substantial.

This problem for patients is rooted in marijuana’s Schedule I designation under the federal Controlled Substances Act, which deems it to have “no currently accepted medical use.”

But even the federal government is changing its position. Last year, President Donald Trump ordered the attorney general to expedite rescheduling marijuana to Schedule III. In April, then-Acting Attorney General Todd Blanche issued a final order moving Food and Drug Administration-approved and state-licensed medical marijuana to Schedule III, while setting an expedited hearing on broader rescheduling that ran through July 15, with a formal recommendation still pending.

Federal rescheduling at least removes the primary legal justification agencies and courts have used to strip those under community supervision of legal access to medical marijuana. Yet, federal rescheduling will not fix the problem for people under state supervision who need medical marijuana. Most states independently schedule marijuana in their own drug laws, and supervision conditions that prohibit marijuana specifically need to be revised.

Courts in Arizona, Pennsylvania and Michigan have already struck down state bans on people under supervision using medical cannabis, with judges ruling that the immunity granted by state medical marijuana legalization does not simply disappear because someone is placed on probation.

Legislatures in Connecticut, New York, Minnesota, Missouri and Colorado have also taken steps to harmonize their supervision systems with medical marijuana legalization, enacting laws to allow those under supervision to participate in medical marijuana programs.

Corrections agencies in Washington, Florida and Minnesota have implemented administrative policies to do the same, creating a system to verify registration with medical marijuana programs and maintain oversight without categorical prohibition.

But for those under supervised release in many other states, re-incarceration is still a risk if they use doctor-recommended cannabis.

Probation and parole officers do not prohibit people under supervision from taking prescribed controlled substances like Adderall, Xanax or OxyContin. Standard probation conditions include carve-outs that permit the use of prescribed drugs, managing risks through documentation, monitoring and clinical intervention when problems arise.

States should extend the same framework to medical marijuana: Verify the recommendation, document it in the case files and treat it like any other prescribed medication rather than an automatic violation that can lead to reincarceration.

The states that have legalized medical marijuana have already made the policy decision that patients with qualifying conditions deserve access to physician-recommended treatment without criminal penalty. Supervision systems in those same states should reflect the intent of medical marijuana laws and protect patients.

Sephria Reynolds-Tanner is a criminal justice and drug policy analyst at Reason Foundation and a former probation and community corrections officer in Washington state. She is the author of Medical Cannabis Access Under Probation and Parole: Removing Barriers to Doctor-Recommended Treatment.

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“Texas can protect children and consumers without rebuilding the drug war.”

By Michael A. Davis

Texas officials have spent years treating hemp-derived THC as if it were the greatest danger facing the state. Now the crackdown is no longer political theater.

Beginning July 31, Texas restored a controlled substance schedule that allows products labeled as containing delta-8 THC—or found to contain more than trace amounts of certain tetrahydrocannabinols—to be detained and referred to law enforcement.

That does not mean every hemp product is illegal. Products that comply with the state’s delta-9 THC limit remain legal. But it does mean many products that adults bought openly from registered businesses have suddenly been pushed out of the regulated marketplace.

Texas leaders may call that a public-safety victory. I see a policy that could make the market less safe.

I write from the perspective of someone who has lived through incarceration and spent years working on reentry. I know how quickly lawmakers can turn a complicated social problem into a criminal offense.

I also know what happens after the speeches end. The politician moves to the next issue, while ordinary people live with arrests, records, lost jobs and closed doors.

There are legitimate concerns about intoxicating hemp products. Some have been sold in packaging that appeals to children. Potency can be inconsistent. Labels can be confusing, and testing standards have not always given consumers the protection they deserve.

No responsible advocate should dismiss those problems. But those problems call for regulation, not denial.

Texas already showed that it knows how to build guardrails. The state imposed a minimum purchase age of 21 and required government-issued identification. Regulators adopted rules involving labeling, testing, packaging and inspections. Those protections could have been strengthened with uniform dosage limits, random state testing, tougher penalties for businesses that sell to minors and clear rules against child-oriented advertising.

Instead, Texas chose to remove certain products from legal shelves while leaving demand in place.

That is where the real danger begins.

A licensed retailer can be inspected. Its products can be tested. A batch can be traced or recalled. A business can lose its license for selling to a child. An illegal seller has no license to lose, no testing requirement to follow and no reason to check identification.

A teenager who walks into a compliant smoke shop should be asked for identification. A dealer operating through social media, a parking lot or an unregulated delivery network will not care whether the customer is 17 or 37.

This crackdown does not eliminate hemp-derived THC. It creates more room for untested products, counterfeit labels and sellers who cannot be held accountable. It may also give organized criminal networks another market to exploit.

That does not mean every illegal sale is tied to a cartel, and we should not make claims the evidence cannot support. But when government closes a legal channel without ending consumer demand, illegal suppliers gain an opening. That is basic economics, not fearmongering.

Texas applies a different standard to alcohol.

Alcohol is sold in grocery stores, convenience stores, restaurants, stadiums and entertainment districts. It is present in homes and at parties across the state. A teenager may never need to fool a cashier to get it; the alcohol may already be in a refrigerator or handed over by an older friend.

Texas does not respond by outlawing beer, wine and liquor for adults. It licenses sellers, checks identification, taxes the products and penalizes violations. The system is imperfect, but the principle is clear: Adult access can coexist with rules designed to protect children.

Alcohol and hemp are not identical. They do not have to be identical for the double standard to matter. If Texas believes regulation can reduce the risks associated with alcohol, it should explain why regulation is suddenly considered impossible when the product is hemp-derived THC.

The imbalance is even harder to defend when we look at the crises Texas already faces.

The state Department of State Health Services says drug poisoning deaths increased 68 percent from 2019 to 2024. In 2023, drug poisoning was the leading cause of injury-related death for Texans ages 24 to 69. Families are still being devastated by fentanyl, while communities also confront gun violence, violent crime, untreated mental-health needs and unaffordable health care.

Those problems require sustained investment in prevention, treatment, enforcement and recovery. They are expensive, complicated and politically difficult. Banning a product is simpler. It creates a headline and allows leaders to declare victory before the consequences are measured.

We should also be honest about the economic interests surrounding this debate.

Hemp-derived THC beverages are becoming real competitors in the broader adult-beverage market. NielsenIQ reported that mainstream retail sales reached $239 million over the latest 52-week period, an increase of 135 percent from the prior year. Some consumers are replacing a beer, glass of wine or cocktail with a low-dose THC drink.

Some alcohol businesses see that market as an opportunity and have begun selling or distributing THC beverages. Others may see it as a threat. That division matters because “the alcohol industry” is not a single voice. Still, political contributions from people connected to alcohol distribution deserve public scrutiny when Texas leaders push policies that could remove a competing product.

Campaign-finance records have prompted questions about major donations to Lt. Gov. Dan Patrick (R), who led efforts to restrict hemp products in the most recent legislative session, from John Nau, a longtime beer distribution executive. A contribution does not prove a deal, and it would be irresponsible to claim otherwise. But Texans are entitled to ask whether established industries have greater access to political power than the small businesses and consumers who will bear the cost of prohibition.

Following the money is not the same as alleging corruption. It is part of holding government accountable.

Texas can protect children and consumers without rebuilding the drug war.

Require every intoxicating product to be sold only to adults 21 and older. Mandate reliable identification checks, child-resistant packaging and plain labeling. Establish reasonable per-serving and per-package THC limits. Require independent laboratory testing, scannable batch information and random state verification. Punish businesses that mislabel products or sell to minors. Fund public education and impaired-driving enforcement.

Those are not weak measures. They are what serious regulation looks like.

Public safety should be measured by harm reduced, not products banned. If the result of Texas’s crackdown is that adults turn from accountable retailers to illegal sellers, then the state will have created the very danger it claimed to prevent.

The question is not whether hemp should have rules. It should.

The question is whether Texas wants rules that protect people—or prohibition that protects politics.

Michael A. Davis is an Austin-based writer, author and reentry advocate whose work examines Texas politics, criminal justice, public policy and communities too often overlooked by those in power. He is the author of the books “The Road to Reentry,” “Pursuing Redemption,” “Reclaiming Freedom” and “The Mind You Inherited.”

Image element courtesy of AnonMoos.

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“Cannabis lobbying groups are arming prohibitionists by demonizing hemp—helping those who have been at war with cannabis for decades… I’ve rarely seen a more self-defeating campaign.”

By Aaron Edelheit, Mindset Capital

Are cannabis organizations working to advance reform? Or are they arming the very prohibitionists who want to stop all THC commerce?

Some regulated cannabis companies and cannabis lobbying groups are hard at work fighting hemp, which they see as unfairly competing with more regulated state-cannabis companies. They celebrated last November when Sen. Mitch McConnell (R-KY) snuck a ban into a government funding bill. But knowingly or not, these same organizations are now working side by side with prohibitionists whose cult-like coalition includes politicians and interest groups who want to keep all cannabinoids illegal.

In my opinion, cannabis lobbying groups are arming prohibitionists by demonizing hemp—helping those who have been at war with cannabis for decades. Today’s prohibitionist movement runs on funding from those who hate THC. Every win against their hated enemy, THC, brings prohibitionists more donations, more influence, more media coverage.

The prohibitionists will do anything to win. Beyond misleading and using scare tactics, they have employed canvassers for the Massachusetts ballot initiative who misled signatories about what they were signing. This is more than just politics or business: people are being incarcerated and having their lives ruined, and families are being torn apart because of a plant that should be regulated, not banned.

The hemp ban gave them momentum: sustained energy, paid media, influencer campaigns, political muscle. Now Massachusetts faces the first ballot initiative to roll back a state-legal market, bought and paid for by prohibitionists. The op-eds and influencer campaigns are in full swing, timed perfectly ahead of a federal rescheduling decision.

What the regulated cannabis industry may not understand, is that by aligning themselves with the prohibitionists they are now fighting the president of the United States. President Donald Trump wants the ban delayed so that there is time for common-sense regulation, and it has been reported that he is personally lobbying senators to give Congress time to get it right.

I’ve rarely seen a more self-defeating campaign. The cannabis industry is waiting on rescheduling, tax relief and eventually banking access, while actively opposing the one person who controls all three.

So, here’s my plea to cannabis companies fighting hemp: stop pushing for a total ban. Don’t fight the first president to deliver real cannabis reform. If you want a fight, fight for smart regulation, not alongside the prohibitionists.

Aaron Edelheit is the CEO of Mindset Capital, a private investment firm with investments in cannabis and hemp beverage companies.

Photo courtesy of Philip Steffan.

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