Good morning.
We’re looking forward to seeing many of you at our inaugural The Highrise event with our friends at Gotham. If you couldn’t make it to New York City for the event, worry not. We’ll be livestreaming the entire event to Cultivated readers. Details and sign-ups below.
Let’s get to it.
-JB, JR, ZH
Today’s newsletter is 849 words or about a 6-minute read.
💡 What’s the big deal?
MISSOURI CLONES
Immaculate conception cannabis
Regulators in Missouri fined at least seven cultivators last year for violating the state's so-called "immaculate conception" rule, which makes it illegal to receive cannabis clones from another state.
What they're saying: “[Regulators] discovered some licensees believed they were permitted to bring in clones or tissue cultures as well as seeds on an ongoing basis. However, this practice is a violation of seed-to-sale tracking regulations,” a spokesperson from the Missouri Division of Cannabis Regulation told the Missouri Independent.
Zoom out: Importing clones is a popular method for new cultivators, especially in new markets where there are far fewer options to buy from existing producers. Often, states will allow for a sort-of grace period in order to better facilitate a market launch.
Last July, one of Kentucky's first medical cultivators, Armory Kentucky, brought in thousands of adult plants from another state. The move appeared to be allowed by the state, though the company and state regulators refused to tell Louisville Public Media where the plants came from.
Missouri did the same when it launched recreational cannabis sales, but cultivators only had one year in which they would import without facing regulator scrutiny.
A known industry secret: Rumors have persisted about illicit clone imports for as long as there have been legal markets in the United States. Back in 2022, Glass House Brands President Graham Farrar and Greg Huffaker from Canna Advisors both shared stories with Supply Chain Dive about others importing clones.
A letter from the Drug Enforcement Administration in 2021 confirmed that the federal government would allow cannabis seeds and clones to be transported across state lines, but only if they contain less than 0.3% delta-9 THC, the active cannabis compound. Despite this, states often uphold the restriction as part of their track-and-trace requirements.
Of course, this could all change if the hemp ban goes into effect this November.
In response to the DEA’s letter, Colorado regulators released a memo in 2022 stating that it was unlawful to send or receive seeds or clones over state lines because they have to be tracked in the state's seed-to-sale system and transfers are only permitted between two operators licensed in the state.
Aside from federal restrictions on transporting cannabis, illicit imports also carry contamination risks. Importing clones from the west coast reportedly led to the spread of hop latent viroid into Massachusetts back in 2023.
-ZH
📣 Quotable
“I’m a veteran and I cannot see any reason that I can’t grow a few plants in my own house for my personal use,” Erik Johansen, resident of Tumwater, told Washington's Senate Labor and Commerce Committee during a Jan. 26 hearing. .
Washington's legislature is considering yet another attempt to legalize home grow in one of the first states to legalize cannabis in the United States.
The Washington State Standard has more.
Can’t make it to New York for The Highrise?
We’ve got you covered.
Tonight, Cultivated is streaming The Highrise live on LinkedIn — a high-signal conversation bringing together leaders across cannabis policy, science, and capital to dig into what comes next for the industry.
What’s on the agenda:
A keynote conversation on the future of U.S. cannabis policy
New insights into medical cannabis research and science
A candid look at what it will take to make cannabis investable again
🗓 TONIGHT
⏰ Program begins at 4:30 PM ET
📍 Live on Cultivated’s LinkedIn
Sign up via LinkedIn to access the livestream.
This is the next best seat in the room.
⏩ Quick hits
Utah Rep. Grant Amjad Miller filed a bill that would decriminalize cannabis. Possession of up to a half ounce would only carry a fine.
Nebraska Governor Jim Pillen signed an executive order on Jan. 27 calling on state agencies to review current laws pertaining to synthetic cannabinoids with the intent of preventing access to unregulated edibles and vapes.
The Bureau of Alcohol, Tobacco, Firearms and Explosives published a proposed rule on Jan. 22 that would allow for some use of cannabis under federal firearms law.
🤝 Deals, launches, partnerships
ScottsMiracle-Gro plans to sell its Hawthorne cannabis unit to Vireo Growth. The two companies entered into a non-binding memorandum of understanding, though the transaction would still need to be finalized. $SMG ( ▲ 3.54% ) will retain an equity stake in Vireo. It’s a long time coming for Scotts, who couldn’t make the economics work on its cannabis bet.
Quebec-based Cannara announced that it has received conditional approval to list on the Toronto Stock Exchange.
HEMPER is set to enter Argentina's market through a new exclusive distribution partnership with Tabacalera Sarandí.
📰 What we’re reading
How Hard Is It To Grow Bud? | Vice