Illinois sells $2 billion worth of cannabis 💰

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Illinois sells $2 billion worth of cannabis💰

What happened: Illinois announced on Thursday that the state sold more than $2 billion worth of cannabis in 2024, a 2.5% increase over the year prior. That’s about double New York’s market. 

Why it matters: Governor JB Pritzker warned that intoxicating hemp products — which were legalized via the 2018 Farm Bill and are able to be sold outside of dispensaries — threaten the legal cannabis industry’s viability. 

What he’s saying: “The numbers are clear: five years after we legalized adult-use cannabis in Illinois, we're seeing the economic impact of a thriving cannabis industry,” Pritzker said. 

“While I am pleased with the continued success of cannabis sales and revenues in Illinois, the market is being undermined by the proliferation of the unregulated intoxicating hemp market.

This unchecked market not only undercuts legal operators but also puts consumers at risk by flooding the industry with untested, potentially unsafe products.” 

What’s next: Multiple states, including California and Missouri, have looked to crack down on intoxicating hemp as a way to both protect consumers and protect the legal cannabis industry. But a recent push to regulate hemp products failed in the state’s legislature. 

And it appears that federal appetite to regulate the hemp industry via the new Farm Bill, set to be renegotiated in Congress this year, is low — though, we don’t yet know what the bill will look like.

We’ll have much more coverage of the hemp versus cannabis battle in the coming weeks. 

-JB

“We have a cultural complacency in the country as to whether it is good to be using drugs,” White House Office of Management and Budget Russell Vought said in an interview last year highlighted by Marijuana Moment. “[You] can’t go to a big city without being involved with this — the smell of it.”

These statements are part of a number of public statements that Vought has made against cannabis, and even — bizarrely for a Republican — publicly calling for the federal government to crack down on state legalization.

Republicans seek to block cannabis tax deductions 🤦

GOP Senators Pete Ricketts (IN) and James Lankford (OK) filed a new bill that would prevent cannabis firms from deducting regular business expenses even if cannabis were rescheduled. The bill, if passed, would amend IRS Code 280E to apply to cannabis businesses specifically. The code states that companies that sell Schedule I or II drugs can’t deduct expenses, which wouldn’t apply if cannabis is moved to Schedule III unless the bill passes. Both Senators have long been opponents of cannabis reform. 

Missouri advances hemp bills 👀

Missouri lawmakers are seeking to reign in intoxicating hemp. A pair of bills advanced out of key state House and Senate committees this week, which would allow hemp-derived, THC-infused drinks to be sold in grocery stores but would limit hemp edibles and vapes to be sold through legal dispensaries, reports The Missouri Independent.

Connecticut pulls out of rescheduling hearings 🤔

The Connecticut Office of the Cannabis Ombudsman, which was set to participate in the now-delayed hearings to reschedule cannabis from Schedule I to Schedule III of the Controlled Substances Act, said it was pulling out of the hearings over the “shenanigans” between the DEA and its improper contact with an anti-legalization group — the original issue that caused the hearing to be delayed. For more background on what’s going on with the hearing, read our January 14 newsletter. 

Hawaii kills legalization push 🌴

Hawaii lawmakers effectively killed a push to legalize cannabis in the state this year, making it the only Democratic-trifecta state without legal cannabis, reports Cannabis Business Times. 

New York releases list of banks that work with cannabis retailers 📈

Readers of this newsletter know that access to banking services remains a huge headache for cannabis businesses. New York’s Office of Cannabis Management published a list of 10 banks and credit unions that work the industry, as part of its push to address the challenges of the state’s equity program. Check out the list. 

SF cannabis store shutters after owner shot 

Vapor Room, a longtime San Francisco cannabis dispensary, is shutting down after its owner, Martin Olive, was shot seven times outside the store, SF Gate reports. Olive has been released from the hospital and is in recovery. You can help him out.

Canopy Growth stumbles 📉

What happened: Canadian cannabis firm stumbled in its first quarterly report under new CEO Luc Mongeau, who took over the top job from David Klein. The company lost nearly $122 million in the quarter on about $75 million of revenue, a 5% sequential decline. 

Go deeper: Analysts expected smaller losses, especially as the company’s international medical cannabis business grew. The company’s stock closed down 27% on Friday, pushing the sector down after Aurora’s strong earnings report caused a short-lived rally. 

Our take: Canopy’s laggard performance makes Aurora’s pivot to international medical cannabis opportunities look smart. You can learn more about Aurora’s strategy in our interview last week with CEO Miguel Martin. Watch that here.

We’ll be interested to see how Mongeau pivots the company, and whether he takes a page out of Aurora’s playbook… 

-JB

iAnthus sells Arizona assets 🥊

Cannabis firm iAnthus is selling two Arizona dispensaries and two cultivation/processing facilities in the state to Sonoran Roots for $36.5 million, the company said. It’s part of the firm’s push to right-size itself as the stock is down over 99% since inception.

When influencer marketing goes wrong 😲

This X thread from The Goblin, a popular Twitch streamer, has been the talk of the industry in recent days. Verano, a publicly traded cannabis company based in Illinois, reached out to see if he would promote their products live on Twitch/Youtube as part of an influencer marketing push.

He turned them down, to say the least.

It’s a cautionary tale on the perils of using influencers as a marketing tool — and another reminder that quality product and customer delight is everything in this industry. 

Note: We have not independently verified all of the claims in this thread. We reached out to Verano for comment and will update when we hear back.

Ohio cannabis sales 🌿

Ohio cannabis retailers sold $93 million worth of product in January, according to the state’s Division of Cannabis Control. 

Here’s a breakdown of where Ohio’s cannabis sales tax revenue goes. Ohio legalized cannabis in 2023, and legal sales kicked off last August. Read more from The Ohio Newsroom.

If you consume cannabis you should be supporting cannabis journalism – here’s why | GreenState

Opinion: Lawmakers can use cannabis tax revenues to strengthen communities | Crain’s

Anti-legalization group vows to go on ‘offense’ | Law360