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Is an inter-agency Rescheduling battle brewing?

An unredacted look at HHS’s recommendation to the DEA

Good morning.

Welcome back from the long weekend (for most). The rescheduling conversation in DC is certainly heating up – as we all got a look at an unredacted version of HHS’ recommendation to the DEA. Plus, we got an exclusive interview about a rare canna-tech acquisition.

A 7.5-minute read from JB and JR

💡What’s the big deal?

DEA vs. HHS?
More details on Health and Human Services’ rescheduling recommendation

Where are we again? Last year, the US Department of Health and Human Services recommended to the Drug Enforcement Agency that cannabis be rescheduled from Schedule I to Schedule III.

Now, the DEA is reviewing the recommendation. As recently as a few weeks back, the DEA felt the need to reiterate to Congress that they are the final arbiter of any possible rescheduling. 

What’s new? Late last week, the full, unredacted, rescheduling recommendation document that HHS sent to the DEA was released, thanks to the good folks at On Drugs. (Subscribe to the On Drugs Substack.)

What’s it say? Instead of reading the full 252-page document – which IS fascinating – On Drugs put together some highlights from the HHS recommendation.

TL:DR: “Cannabis has a potential for abuse less than the drugs or other substances in schedules I and II; Cannabis has a currently accepted medical use in treatment in the United States; and Abuse of cannabis may lead to moderate or low physical dependence or high psychological dependence.”

We have to wonder: With the timing of HHS' unredacted release coming two weeks after the DEA’s letter to Congress underscoring their role as ultimate arbiter, the Cultivated team can only wonder if there is a bit of a DC-insider battle heating up between HHS and the DEA…

Ample Organics acquired by GrowerIQ

What happened? Yesterday, GrowerIQ announced they were acquiring Ample Organics

According to a press release, “This strategic acquisition, concluded in December 2023, marks a significant expansion of GrowerIQ's operations, not just in Canada but also on the international stage.”

What they’re saying: In an interview with Cultivated, GrowerIQ CEO Andrew Wilson added some additional context to the transaction: “We have been well connected with the Ample team for many years, and have many former employees as part of our team. When Akerna started exploring the sale, they went to John Prentice, Ample's Founder. He has other projects that he was working on and wasn't looking to get back to Ample, but he thought we might be interested and reached out. We felt it was a great addition to the GrowerIQ business and started conversations soon after with Akerna.”

Some background: During the early days of Canadian cannabis, identifying a seed-to-sale technology that allowed companies to be both compliant and efficient was impossible to find. 

Enter Ample Organics, a Canadian-based technology company that launched and scaled during the build up to adult-use legalization in Canada.

Shortly thereafter, Ample’s founder and CEO issued a public letter harshly criticizing Akerna, their acquirer

Why it matters: It is no secret that the cannabis industry has seen a dearth of deals in recent years. We asked GrowerIQ’s Wilson if he thinks this deal might be a sign of an upswing of deals: “I think the cannabis industry has some real value behind it. Real products are created that help patients or serve rec markets. While there are strong headwinds in the space, there will always be value to be found, and good businesses doing well.”

🥊 Quick hits

Hoosiers feeling the pressure: Indiana is having a harder and harder time saying no to legalization of cannabis with neighboring states grabbing customers and their associated tax dollars. There are a number of bills to legalize in some form or fashion. Multiple bills aimed at legalizing cannabis in Indiana have been introduced for the 2024 session.  

Wisconsin Republicans debating approach: Like the Packers playoff run, the cannabis conversation continues in Wisconsin. But not all Republicans – who are the in legislative majority – are on the same page. Questions are emerging about how far some rural Wisconsinites might have to travel to purchase their medical if only 5 State-run dispensaries exist. 

Cannabis loved the Solo PR stunt, but: While the cannabis industry was abuzz about the 2023 Snoop Dogg/Solo Stove PR stunt, it didn’t drive Solo Stove sales. Remember that Snoop vowed to quit “smoke” which really meant he was announcing his partnership with Solo Stove. But Solo Stoves didn’t move off shelves. So Solo’s CEO is out.

Lounges in 2024?

What’s happening: What happens in Las Vegas may stay in Las Vegas, but so far, lounges have not been happening in Las Vegas.

2024 might be the year they kick off.

Figuring it out: While adult-use cannabis has spread to nearly two dozen states, not to mention the entire country of Canada, cannabis lounges have been slow to develop. And it’s no different in Las Vegas. 

What they’re saying: The head of the Nevada Cannabis Association told 8 News Now in Las Vegas shared what the challenges/hold-ups with the regulations being developed include: “It’s ventilation, it’s security, it’s safe consumption and driving, it’s training…Those are the types of regulations that we’re talking about.”

What’s next? Yes, there have been delays in getting lounges off the ground in Las Vegas, but there seems to be a renewed push to get lounges launched in 2024. 

The Cultivated team caught up with the team at Planet 13 in Las Vegas late last year, and they shared their plans for an on-premises lounge at their location just off the Las Vegas strip. 

Watch the full segment with Planet 13. 

🎒 What we’re reading