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DEA misses a deadline, in a move that shocks no one

Plus, Germany’s set to vote on legalization, and more

Good morning.

It’s Thursday, and it’s time to read your Cultivated. If you missed Jeremy’s conversation with the American Cannabis Bankers Association yesterday, you can still watch the full thing

Let’s get to it.

A 7.5-minute read from JB and JR

💡What’s the big deal?

And we wait some more for rescheduling

Driving the news: On January 29, Senate Majority Leader Chuck Schumer, Sen. Elizabeth Warren, and 12 other Democrats signed an open letter urging the Drug Enforcement Administration to fully remove cannabis from the list of federally controlled substances.

The Senators also asked the DEA to respond to six detailed questions about what the agency is doing regarding rescheduling cannabis by February 12.

That deadline has come and gone

Why it matters: Despite what the Vice President touts on social media, the ultimate decision regarding cannabis’ federal status rests with the DEA. And the agency hasn’t indicated, well, much of anything about its intentions. 

Retail investors, as you’ve probably seen on social media, are in a tizzy trying to read the tea leaves about when an announcement may or may not occur. 

What happens next: While it’s unlikely the Biden-appointed DEA head, Anne Milgram, goes against what her own government recommends, it is getting a little bit suspicious that this announcement is taking so long.

Remember, the Department of Health and Human Services (HHS) recommended that cannabis be moved from the most restrictive Schedule I to the least restrictive Schedule III months ago. 

Again, we’ll know when we know, but we hope the DEA moves sooner rather than later. 

Quick hits

South Dakota Gov. Kristi Noem, who you may recall has pushed back against legalization in her state at every step she could, signed a bill into law that will require medical cannabis patients to check a box indicating that federal law prohibits them from owning firearms. 

Thailand is set to pivot the industry from recreational back to the medical market — throwing a huge wrench for thousands of businesses, MJ Biz Daily reports. We’d say that putting the toothpaste back in the tube is an uphill battle.

Russia detained a German man who had flown to St. Petersburg carrying a pack of THC-infused gummy bears, Reuters reports.

The Travel Agency, one of the first dispensaries to open in New York City — right on Union Square — celebrated its first anniversary on Wednesday. The store said it generated over $5 million in tax revenue for the state, while creating 120 jobs, and serving 125,000 customers. 

Daily cannabis users are more tolerant to cannabis’ effects, according to a new study published in the Journal of Cannabis Research. The study’s results could inform policy around cannabis and driving — and how some technologies, like Druid, could be far more effective than a breathalyzer or a blood test at measuring acute impairment.

Legalization vote set for next week

What happened: While the US dilly-dallies, Germany is springing to action. 

Deutsche lawmakers officially put cannabis legalization on the agenda for a vote next week. 

If it passes, which looks likely, Germany will be on track for legalization to begin in April, multiple outlets are reporting. (Just in time for 4/20!)

Why it matters: Germany will become the third European Union country to legalize cannabis after Malta and Luxembourg, and will join just a handful of other countries globally that have legalized cannabis. 

Unlike Malta and Luxembourg, however, Germany is a highly developed, financialized economy that, for all intents and purposes, leads the Eurozone. As Germany goes, so might the rest of Europe. 

Yes, but: While Canadian cannabis companies salivate at the opportunity to ship cannabis to millions of customers in Europe, Germany seems to be charting a different path.

The country’s legalization plan has so far avoided the creation of a commercial marketplace. Rather, Germany’s plan would allow people to grow cannabis at home, and then later in the summer, distribute cannabis through members-only ‘social clubs.’

That’s a model that other European countries, like the Czech Republic, seem keen to follow. 

It remains to be seen whether the opportunity for big business and tax revenue will trump this, but as it stands, Germany’s legalization looks like a very different model than Canada’s.   

Architect of legalization bill admits missteps

What happened: New York Rep. Crystal Peoples-Stokes, one of the architects of the Marijuana Regulation and Taxation Act (MRTA) — the bill that legalized cannabis in the Empire State in 2021 — admits that there were some missteps in the rollout in an illuminating interview with WNYC’s Capitol Press Room

It’s worth a full listen if you’re interested in New York cannabis, which we know many of you are. 

What they’re saying: “The only thing I think we could have done different is to regulate before we legalized,” Peoples-Stokes said. “Because by legalizing without regulations, the illicit market just kind of stormed the whole issue.”

You could say that again. 

Why it matters: New York’s cannabis rollout has been far too slow, and plagued with false promises from lawmakers and regulators. Meanwhile untaxed, illicit operators have flooded the market with untested, bootleg, and potentially unsafe products. 

Yet the Empire State grows some of the best strains around, we can attest — and many of these growers are dying to be able to sell legally. It’s just impossible to do it, thanks to too-much red tape. Or, it’s better for business to remain illegal, given the high taxes and compliance costs. 

We won’t beat a dead horse as to why this situation is untenable and needs to be resolved, quickly. 

Even Gov. Kathy Hochul called the rollout a “disaster”. 

What’s next: Other states seem to be learning from New York’s missteps. Minnesota, which legalized cannabis last year, is working through the careful balance of prioritizing social equity with consumer access. 

The sponsor of Minnesota’s legalization legislation, Rep. Zack Stephenson, put it this way: “Everyone agrees that the sooner we can get licensed dispensaries open, the better. The point of the law is to replace the illicit market with a legal market.”

🎒 What we’re reading

📈 Deals, launches, partnerships

The American Weed Company is set to sponsor the Cali Vibes 2024 music festival in Long Beach, with Ice Cube and Gwen Stefani headlining. The company says it’s the first cannabis company to headline-sponsor a major music festival.

📊 Chart of the day

Illicit cannabis shops have far more product variety than legal cannabis shops in Canada over five years into legalization, according to a new report from Deloitte:

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