Good morning.
We’re looking forward to seeing many of you at our webinar tomorrow in partnership with Moby, where we’ll do a 101 primer on cannabis investing with execs from Glass House, Cronos Group, Verano, and High Tide. Register » and we’ll see you there!
Let’s get to it.
-JB, JR
Today’s newsletter is 943 words or about an 8-minute read.
💡What’s the big deal?
OH, DEA
DEA hearings wrap up today
Driving the news: The DEA hearings wrap-up today. It’s not yet clear when we’ll have a final rule from the judge, but until then, we all wait with bated breath.
If you need to catch up, here’s the coverage that you missed:
We sent journalist Natalie Fertig inside the hearing room. And then had her come on Cultivated Live and talk about what she learned.
We spoke with attorney Gary Kaminsky, who was inside the hearing room and helped prepare one of the key witnesses in support of rescheduling.
Jeremy explained the CAMU argument at the core of the hearing, and why it matters, legally, for the DEA’s ultimate decision.
And he also got some scoops into what’s happening inside the room.
The final word: We don’t want to speculate on the final outcome. But we can glean some important details. For one, the DEA has seemed content for the entire two-week hearing to barely cross-examine witnesses.
It could be because they have a relatively easy case to prove: Cannabis has at least one defined medical use and therefore shouldn’t be Schedule I. Or, perhaps pessimistically, it could be because their heart isn’t really in it.
And two, it appears the groups opposed to rescheduling aren’t debating rescheduling itself. They’re putting on the record all of the supposed harms of cannabis use onto the record for a later appeal in federal court.
And more: We’ll have a deep dive story from Natalie breaking this all down for you. Aren’t you so lucky to be a Cultivated subscriber?
🗨️ Quotable
“What we are left with, after fifteen days of hearings, is a lopsided hearing record built almost entirely by the side that opposes rescheduling, with DEA offering little pushback of its own,” Harris Sliwoski’s Jason Adelstone writes in a blog post about the rescheduling hearings.
“Whether that was complacency or strategy may not matter much in the end, because either way it hands the prohibitionists a stronger foundation for their arguments than the facts actually support.”
⏪ In case you missed it
Jay caught up with Fine Fettle Georgia’s Judson Hill on Tuesday’s Cultivated Live to chat about all things Georgia and how the recent changes to the medical cannabis regulations have expanded the market dramatically.
⏩ Quick hits
Hemp bev companies plan for upcoming ban 💰
Basin Street Beverages cut four out-of-state sales positions and is pivoting to its first non-THC product due in September, while Crescent Canna laid off 20 employees and Parish Brewing is winding down its THC line to sell through inventory before the November 12 ban kicks in. Crescent Canna says it still expects a legislative fix through the September continuing resolution, but noted that optimism needed to be tempered with the current Congress.
New York schools get a cannabis curriculum 📚
New York's Office of Cannabis Management released "Cannabis Honestly," an education campaign for teens, parents, and educators built on listening sessions with roughly 450 young people and caregivers across the state. Five years after legalization, roughly a third of teens surveyed still didn't know the legal purchase age is 21.
Hemp beverages are still legal in Ohio...for now. 🧑⚖️
A federal judge in Ohio extended the preliminary injunction preventing state authorities from enforcing a new ban on hemp-derived THC products. The injunction is part of a lawsuit that was filed in June on behalf of 10 THC beverage companies.
📊 Insights
LIT ALERTS
8ths in Connecticut just dropped $1.65 in one month — and that's your warning sign
The latest Lit Alerts East Coast 8th Index just dropped for July and 8ths in the Connecticut plunged from $33.89 to a historic low of $32.24 last month. New York broke below $37 for the first time. New Jersey staged a brief rebound to reclaim top spot at $37.23.
Here's what matters: Three out of five East Coast markets hit all-time lows in July. This isn't seasonal volatility — it's a structural realignment.
Connecticut's sudden capitulation suggests wholesale inventory flooded the market simultaneously, forcing heavy discounting.
As supply chains saturate across the region, the data points to one inevitability: prices are converging toward Massachusetts's floor at $23.
If operators can't survive at $32 today, they won't survive at $25 tomorrow.
💭 Thought bubble
Recently, I tried to create a paid ad on LinkedIn promoting a cannabis investing event we’re co-producing with Moby (which you should sign up for »). The ad was flagged as soliciting the sale of an illegal drug, even though it was a webinar about investing with publicly traded companies who sell only in jurisdictions where they’re legal.
It just goes to show that we’re all trying to build businesses with one hand tied behind our backs. LinkedIn is one of the friendlier social platforms for cannabis industry discussion, but it’s not friendly enough.
-JB
🤝 Deals, launches, partnerships
Highest Standards opened its doors on Tuesday as the first cannabis shop in New York City’s financial district. Managing Partner Eric Hammond previously ran an upscale smoke shop called Higher Standards which had a location in NYC’s Chelsea Market, Malibu, and Atlanta.
🗞️ What we’re reading
What budtenders wish every dispensary shopper knew | GreenState