Respecting the DEA's authority

WHEN THE DEA SPEAKS
DEA restates their authority

Rescheduling soon? Rescheduling is on cannabis industry minds. We write about it all the time.

But we also know that the DEA remains the final word in rescheduling, no matter what the Department of Health and Human Services would hope.

What happened? While you were (maybe) on vacation, the DEA did acknowledge last week that they are indeed “conducting its review”. 

And? In a letter to Congress, the DEA’s Congressional Liaison reiterated that the DEA has “has the final authority to schedule, reschedule, or deschedule a drug under the Controlled Substances Act…” 

Duly noted.

BORDER TOWNS
When states snooze, they lose (cannabis consumers)

IYKYK: One of the best places to locate your cannabis retail establishment is right on the border of a state without legal cannabis. Think Nevada and Utah. Kansas and Colorado. New Mexico and Texas. 

Why it matters: States that are slow-rolling their legalization efforts aren’t really stopping their residents from buying legal cannabis. They’re stopping their residents from buying legal cannabis locally.

Which is why Wisconsin and Pennsylvania are feeling the rush toward legalization, which we wrote about before the break: Wisconsin’s path to legalization

NY Times now knows: The New York Times has caught wind of the benefits of being a legal cannabis operator in a border town. They wrote about this trend this week: Marijuana Buyers from Texas Fuel a “Little Amsterdam” in New Mexico. 

POTENTCY
Florida lawmaker wants to cap THC at 10%

Sunshine’s path: Florida has a huge medical cannabis program, 831,000+ patients strong, according to Marijuana Policy Projects’ July 2023 numbers. And, a measure to legalize adult-use cannabis is set to be on the November 2024 ballot, pending a Supreme Court case currently being argued. 

But wait, there’s more: With a big market already in place, and a legalization measure hopefully in the works, a Republican Florida House of Representatives member Ralph Massullo introduced a bill that caps THC in would-be adult-use flower products at 10 percent. (Note: The previous sentence is not a typo.)

Why it matters? Hopefully, if you’re reading this newsletter, you know what a bad idea a 10 percent cap on THC is. Aside from the challenge of producing ultra-low THC flower, the truth is that THC sells.

Love it or hate it: Cannabis consumers often shop by potency. And if they can’t get the potency legally in Florida’s future adult-use market, consumers will certainly find high-potency flower somewhere else.

Here’s hoping cooler heads prevail in the Florida legislature. 

BANKING
Federal legalization doesn’t mean banking gets easier, necessarily

What’s happening? US cannabis advocates talk a ton about how federal legalization would normalize banking for cannabis businesses. Turns out, that may be optimistic.

In Canada, where cannabis has been federally legal since 2018, cannabis advocates say banks still refuse their business, especially the “big 5’ national banks in Canada.

Why it matters: Big banks didn’t get big from taking risks. And the truth is that banks, especially large national banks – whether in Canada or in the US – find the cannabis industry risky.

This is going to take time to rectify and overcome.

What’s next? All (cannabis) eyes in DC are focused on rescheduling.

The Department of Health and Human Services has recommended as much to the Drug Enforcement Agency, and the DEA is currently reviewing. (See the first story above.)

One of the big benefits of rescheduling could be normalization of banking – or at lease more normalization. But, as Canada has learned, it may not be fast, or easy. 

Marijuana Reform and Taxes: How States Tax Adult Use Cannabis and Spend Resulting Revenue | Ohio State Legal Studies Research Paper No. 812