Judge orders CA to fix broken track-and-trace system ⚖️

CALIFORNIA
Judge orders California to fix broken track-and-trace system ⚖️

What happened: An Orange County Superior Court judge ruled last week that California’s top cannabis regulator failed to implement a reliable system to flag irregular transactions in the state’s mandatory track-and-trace system operated by Metrc.

Judge Lee Gabriel in a final judgment ruled that the Department of Cannabis Control must implement safeguards to flag irregularities for further investigation and/or review by DCC staff, per statutory mandate.

Back up: The original lawsuit was filed more than five years ago by HNHPC Inc., a holding company owned by Elliot Lewis, the CEO and founder of Catalyst Cannabis Co., the second largest dispensary operator in the state with 34 stores.   

Despite the legal victory Lewis told Cultivated he’s never been more pessimistic about regulators mitigating the proliferation of untracked products in and out of the state.

What he’s saying: “I've come to the conclusion, not lightly, that it's intentionally left broken,” he said. 

“We tried to settle the case 100 different ways with the lowest possible bars that we could put in and they didn't want to do anything at all. They would rather fight. We didn't want to go to trial.” 

What’s next: The court ordered DCC to implement changes in Metrc’s track-and-trace software to flag irregularities within 180 days of the ruling. It also ordered DCC to pay for legal fees, a cost Lewis estimated at around $250,000.

A DCC spokesperson told Cultivated the agency does not comment on pending or ongoing litigation. DCC is the nation's largest cannabis regulator with 600 employees and an annual budget of $200 million.

The ruling is another lump for Metrc, which has drawn criticism over the years on several fronts, from cost and reliability concerns to migration and implementation challenges.

The final word: In California, Metrc inked a four-year contract extension that took effect in July 2024 that tops out at $113.6 million, with an annual ceiling of $28.4 million.  

DCC director Cliff Kellum told Cultivated in March the agency estimates that 60% of cannabis sales last year were outside the regulatory market. That amounted to $5.8 billion filtered through underground channels.

-CC

“It is 330 am and good news for hemp farmers, brewers, small businesses & customers!” Sen. Amy Klobuchar (D-MN) said on Saturday morning after Sen. Ted Budd (R-NC)’s amendment to strip the delay out of the federal funding bill was voted down in the Senate. 

“On a 61-32 vote the Senate just defeated an effort to strip my provision that would delay the hemp ban. This gives Congress more time to find a solution, like the sensible safety rules in MN.”

Hemp industry companies like Cheech & Chong and Cornbread Hemp cheered the move, while ATACH, a cannabis and hemp group, called the vote “undermining state laws.” The funding bill now goes to the House. 

The idea is that legislators can come up with comprehensive regulations before the ban goes into effect in December. They’ve had nine months already.

The clock’s ticking…

It was hemp-a-palooze on Friday’s This Week in Cannabis Live, where Marc, Jay, and Jeremy broke down what’s going on in the Senate, cannabis earnings, and more.

Catch up here »

California seizes $168M in illicit cannabis, tobacco since 2019 💰

California's tax agency has recovered $168 million in illicit cannabis and tobacco products since 2019, including nearly $22 million in the first half of 2026 alone. The figure is part of a broader push that's also netted $1.3 billion in illicit cannabis seizures through the state's Unified Cannabis Enforcement Task Force.

New York busts $17M illicit cannabis operation in record OCM seizure ⚖️

New York regulators and Greece Police Department seized more than $17 million in illicit cannabis, products, and processing equipment, the largest haul in OCM's enforcement history. Investigators found gummies packing 300 mg of THC and candy bars at 10,000 mg, both dozens of times over the state's legal dosage limits.

Join Sweed and Cultivated for a candid conversation with retail leaders from Nova Farms and Black Canna as we explore what it takes to turn first-time visitors into loyal, repeat customers.

Together, we'll discuss:

- Local visibility and discoverability
- Customer acquisition strategies that drive traffic
- Conversion opportunities that increase retention and lifetime value

You'll leave with practical ideas you can put to work right away to improve how customers find your dispensary, what they experience once they're there, and why they keep coming back.

Moderator:
Brad Cross, CRO, Sweed

Panelists:
- Matt Davidson, Vice President of Retail and Marketing, Nova Farms
- Larry Leggett, Founder, Black Canna
- Jay Rosenthal, Co-Founder & Managing Director, Cultivated

Register today »

Recreational cannabis consumers want more transparency on tax spending 📊

A qualitative study conducted by the Parabola Center found broad support for legalization among 37 consumers across nine established recreational markets, but recurring frustration that tax revenue isn't reaching communities as promised. Researchers also flagged overregulation squeezing small businesses and concerns about youth access as the most common critiques.

New York's cannabis equity program has failed its own goals ⚖️

A new Cornell Law Review note argues New York's Social and Economic Equity program has fallen far short of its aims, citing a 4.3% dispensary license approval rate, predatory loans carrying interest up to 18%, and an illicit market that outnumbers licensed shops more than 5-to-1. The author recommends New York adopt elements from Massachusetts, Oklahoma, and Washington, including lower application fees, grant-based funding instead of loans, and streamlined licensing.

Trulieve posts $271M in Q2 revenue, becomes first cannabis company on NYSE 💰

Trulieve reported Q2 revenue of $271 million and a 60% gross margin, though GAAP results showed a $406 million net loss driven almost entirely by a one-time charge from deconsolidating Harvest. The company also became the first U.S. cannabis operator listed on the NYSE, trading under ticker $TRLV ( ▲ 3.2% )

Canopy Growth narrows net loss to $14.6M as revenue climbs 13% 💰

Canopy Growth reported fiscal Q1 net revenue of C$81.2 million, up 13% year-over-year, with net loss narrowing 68% to C$14.6 million from C$44.9 million a year earlier. Growth came from all business lines, led by a 22% jump in Canadian medical cannabis revenue. $CGC ( ▼ 0.97% )

Here’s the rest of the calendar:

Aug. 10
Village Farms International - 7:00 AM

Aug. 11

Vireo Growth - 8:00 AM
Ascend Wellness Holdings
Organigram

Aug. 12
Marimed 

Aug. 13
Chicago Atlantic - 9:00 AM

Cannabis beverage company Uncle Arnie's raised $2 million from existing investors, including Mindset Capital, to expand its dual-track lineup of recreational cannabis and hemp-derived THC beverages.

Colorado man at center of push to delay federal hemp ban | The Denver Gazette

The Quirky, Luxurious and Stylish Cannabis Dispensaries of New York | The New York Times

Marijuana legalization won’t fix Iowa’s budget | Iowa Capital Dispatch

Turning Over New Leaves: Achieving Equity Through Cannabis Licensure Reform In New York | Cornell Law Review