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How are cannabis companies preparing for the DEA's decision on rescheduling?

Regulatory change is a hot topic in the cannabis industry right now. A guest post from journalist Andrew Ward shows how businesses are prepping.

Happy Friday everyone,

This story comes from freelance journalist Andrew Ward. You’ve read him in Cultivated before.

As an aside, if you’d like to advertise in Cultivated — simple reply to this email and I’ll walk you through the process. I’d love to have you on board.

Beyond that, I hope you enjoy Andrew’s story.


Today’s Cultivated is sponsored by Durée & Company.

Durée & Company is one of the top public relations and marketing firms in the cannabis industry.

I can say that with confidence: I’ve worked with the team and their deep roster of clients on many stories, and I always value their insight and expertise about all things cannabis.

Their team makes a commitment to stay ahead of the curve on the ever-changing landscape of cannabis regulations. They maintain a strong network of connections with media, influencers, and thought leaders to ensure they can get your story placed.

Durée & Company works with companies across the cannabis supply chain, from growth and manufacturing to testing and professional services.

green leaves in close up photography

Regulatory change is a hot topic in the cannabis industry right now. 

After years of conjecture and speculation, the industry seems to be moving toward some substantial federal reform, either through the SAFER Banking Act — a bill that would allow cannabis companies to access the banking system — and the Drug Enforcement Agency's possible rescheduling of cannabis to a Schedule III drug

While nothing is yet confirmed, the industry is waiting with bated breath.

In recent weeks, Congressional researchers suggested that the DEA will likely follow the Department of Health and Human Service’s recommendation to move cannabis to Schedule III.

The move would shift cannabis from a Schedule I drug — those considered to have a high potential for abuse and no medical use — to a much less restrictive regime, similar to codeine.

But, with a decision possibly not coming until around the 2024 election, many businesses wonder what to do now and how they can plan for the future. 

To report this story, I asked various cannabis companies through email and social media their thoughts on rescheduling and how they’re strategizing for their business in the meantime. 

For some companies, it’s business as usual while waiting for the DEA decision.

Others are prepping for potential regulatory changes and what that could mean for their company's product offerings, tech stack, license acquisitions, and much more. 

"We aren't counting our eggs until they're hatched," said MariMed CEO Jon Levine. "We will take the same disciplined approach to our spending."

Business as usual?

Several cannabis brands say they're preparing for potential rescheduling, but operations remain the same for now. 

Dutchie CEO Tim Barash said the cannabis ordering platform continues working with thousands of dispensary partners as usual.

"We've also been fighting for our merchants in Washington," said Barash of the company's plans on Capitol Hill. Dutchie co-leads the Coalition for Cannabis Scheduling Reform along with the United States Cannabis Council

Aaron Bloom, CEO of telemedicine platform DocMJ, said that his company continues to focus on regulations and patient care and will be ready for regulatory change. 

Other companies are taking careful steps

Most companies say they're taking steps to prepare for the DEA decision.

Numerous operators say they're taking a careful approach to rescheduling and its possible effects. While discussing plans in broad strokes, most operators avoided going into specifics or any potential impact the move would have on their bottom lines.

MariMed’s Levine said that while he would like to see cannabis de-scheduled, the company is preparing for a time when 280E tax restrictions aren't a burden. 

Levine says rescheduling could increase cash flow and "further strengthen our ability to invest in R&D, our facilities and our employees." 

Chris Becker, sales director for Colorado-based brand The Honeybee Collective, said the potential for rescheduling led the company to pause all license acquisition talks until they can clarify the potential impact the DEA’s decision could have.

"Until we have more insight, we are continuing to operate as we currently do under an asset-light brand model," said Becker. 

Most brands didn't elaborate on their efforts but noted they are focused on developing new products or bringing more into the fold if the time comes. Others are focused on pieces like tech and regulatory compliance. 

"We've been preparing to support our customers with any new tools and partners that become accessible after federal policy shifts," Dutchie's Barash said.

Others are preparing for possibly expanding their product offerings.

Hans Enriquez, CEO of Texas-based brand Dazed Inc., said his company is looking to invest in new products. 

"Our goal is positioning and our models allow us to adapt to federal and state changes," said Enriquez, noting that his Texas stores sell hemp-based products, including Delta-8 and Delta-10. The company's recently opened location in Albuquerque, New Mexico allowed the brand to expand into THC-focused products. 

"That's the advantage to operating in hemp and recreational cannabis markets," Enriquez said.

It’s a waiting game

For now, most companies are looking to get their ducks in a row without knowing what the landscape will be in the coming months. 

Despite the uncertainty, many believe that reform will happen soon enough. 

Dutchie's Barash echoed the sentiments of many, saying his company "Always believed that it was a matter of if, not when, federal policy catches up with the movement we've seen in practically every single state."