Good morning and happy Friday.
We’ve got a jam-packed end-of-week edition for all of you today, so grab a cup of coffee and let’s get to it.
Chris Casacchia interviewed Clint Kellum, the new director of the California Department of Cannabis Control. They had a wide-ranging chat about the challenges Kellum inherited — and his plan of action to turn things around. There’s a snippet below, but make sure you click through the link to read the full story.
And if that’s not enough, tune into This Week in Cannabis Live where Jay and Jeremy will be joined by the team from High Spirits and Cannabis Musings. Find it on our LinkedIn and YouTube channels, or Jeremy’s X page. (And follow us while you’re there).
-JB, JR, ZH
Today’s newsletter is 1,209 words or about a 10-minute read.
📅 CULTIVATED CALENDAR
Upcoming Cultivated events that should be on your radar:
May 5-7 | Cultivated @ MJ Unpacked
May 28 | Midwest Cannabis Summit TICKETS AVAILABLE NOW
💡 What’s the big deal?
CALIFORNIA DREAMIN’
California’s new DCC Director inherits a tough hand. He says he has a plan.
Clint Kellum has one of the most difficult jobs in the cannabis industry.
The 18-year California government insider, who most recently served as chief deputy director at the state’s Department of Cannabis Control (DCC), was appointed in January by Gov. Gavin Newsom to lead the agency, replacing Nicole Elliott, who held the position since 2021.
The DCC is the largest cannabis regulator in the country with nearly 600 employees and an annual budget of about $200 million.
His agency’s oversight is immense: nearly 8,000 license holders, including 4,600 cultivators and 1,450 retailers and delivery providers sprawled across 163,000 square miles. The state’s enormity, coupled with years of lax enforcement against unlicensed growers and sellers following the launch of recreational cannabis sales in 2018, has exacerbated a deep-rooted challenge to rein in illicit operators while attracting consumers to licensed retailers.
Kellum’s top priority is reversing the trend.
“Based on information and estimates we have from our economists, about 40% of the cannabis consumed in the state comes from the legal market,” the DCC director said in an exclusive interview with Cultivated.
The stark admission is an eye-opener, considering some market watchers have long estimated California's illicit market is roughly twice the size of the regulated one. Last year, licensed retailers generated $3.9 billion in sales, down 7.1% from 2024 and a third straight yearly drop.
Based on DCC’s assessment, an astronomical $5.8 billion in cannabis sales last year were filtered through the underground market.
The long-term effects have been devastating for license holders, which pay high taxes, fees and other premium business expenses in the highly regulated sector. Hundreds have shuttered over the last few years, most leaving behind massive debt and unpaid invoices.
Kellum aims to close the sales gap through a four-tiered approach:
Trusted and safe products through traditional licensing and compliance work
Sustained enforcement on the illicit market
Public awareness campaigns steering consumers to licensed retailers
Reducing regulatory burdens on compliant operators
“There really isn't a silver bullet,” he told Cultivated.
-CC
📣 Quotable
“A free-for-all market where we are at $4.05 a gram … no matter how good you are as an operator with your profit margins, at some point there’s not enough money to pay your bills,” Canna Provisions CEO Meg Sanders told The Boston Globe.
Prices in Massachusetts have flattened near the $4 dollar mark making a lot tougher for businesses to survive, leading some operators to call on state regulators for a licensing freeze.
⏩ Quick hits
Medicare's CBD pilot, which is still being finalized ahead of its April 1 deadline, will reportedly allow up to 3mg of THC in covered products.
Pennsylvania Republican Rep. Guy Reschenthaler filed HR 7987 on Mar. 18. The text of the bill is not yet available, but based on its title, it would protect any person who provides business assistance to cannabis operators, while also creating a safe harbor for major domestic exchanges to list cannabis businesses — the fabled “uplisting” of US cannabis firms to major domestic exchanges. It's with the U.S. House Committee on Financial Services.
Intoxicating hemp and hemp beverages are officially out in Ohio as of Friday, after activists failed to obtain the 250,000 signatures needed to challenge the new rules via ballot measure.
Colorado lawmakers are reportedly working on a bill that would allow restaurants and bars to serve THC beverages.
Prospective operators are still waiting for action from Florida regulators three years after they promised to issue 22 new vertically integrated business licenses.
🚀 Deals, launches, partnerships
Tilray announced a major expansion of its product portfolio in Australia's medical market. $TLRY ( ▼ 2.25% )
💰 Earnings roundup
Grow Generation reported a $7.6 million loss on $37.8 million in net sales for the fourth quarter of 2025. The net sales were about equal to how the company did in the fourth quarter of 2024, but thanks to reduced costs they were able to cut about two-thirds of their total loss. For the full year, the company reported a $24 million net loss on $162 million in revenue, down from $189 million the year prior. $GRWG ( ▲ 3.81% )
⏪ In case you missed it
The Empire State Pivot is a webinar series from Cultivated and Lit Alerts focused on helping New York cannabis transition from rapid expansion to durable, sustainable growth. Flamer, CONBUD, and Lit Alerts joined on Thursday to discuss how New York operators can survive price compression.
Watch it here:
😜 One fun thing
Afroman, who was once best known for his weed anthem "Because I Got High," had a successful day in court Wednesday evening after spending the last few years humiliating his local sheriff's department.
Joseph “Afroman” Foreman faced defamation claims from the Adams County Sheriff's Department after he made a series of music videos lampooning the officers, personally insulting them and using his home's surveillance footage of the officers after Afroman said he was unfairly targeted and harassed.
The sheriff's department raided the musician's Ohio home in 2022 by the Adams County Sheriff's Department based on their claims that they believed he was in possession of illegal drugs. The Sheriff's Deputies reportedly damaged his home and $400 in cash went missing.
Seriously, you owe it to yourself to watch the videos of Afroman on the witness stand which have been flooding social media over the last few days.
📊 Chart of the day
Here's some interesting data from Pew about how different countries around the world view cannabis.
People with less education are far more likely to say using marijuana is wrong than those who attended college or have advanced degrees. And countries with legal cannabis like Canada have far more permissive attitudes towards use than countries with strict bans, like Indonesia.
🧳 People moves
Canada's Globe and Mail is looking for readers who are choosing cannabis over booze. Send your stories to [email protected]
📰 What we’re reading
Massachusetts Cannabis Workers Demand Safety in CCC Listening Session | Talking Joints Memo