Good morning and happy Friday.
We’re battening down the hatches for a coming Nor’Easter here in New York City this weekend, but Jeremy’s looking forward to taking a few “board meetings,” with the boys out at Rockaway Beach.
And, if you’re looking for something fun today, check out our new feature, the Cultivated This Week in Cannabis Crossword Puzzle. If you read this newsletter each week, the puzzle this week should be a breeze.
Let’s get to it.
-JB, JR, ZH, NM
This newsletter is 800 words exactly or about a 6-minute read.
💡 What’s the big deal?
HEMP
Ohio Governor moves to rein in intoxicating hemp 🛑
What happened: Ohio Governor Mike DeWine signed an executive order on October 8 requiring retailers to stop selling intoxicating hemp products containing THC.
DeWine claims that the Ohio Poison Control has received an increase in reports of THC poisoning thanks to these products. There were 994 reports in 2024, up from 419 in 2021, with more than half of those cases involving children who were five or younger.
The ban goes into effect on October 14.
What they're saying: “When voters chose to legalize marijuana, they voted for a highly regulated market that only allows sales at licensed dispensaries to those 21 and older,” DeWine said.
“Intoxicating hemp completely bypasses these laws, and we must do more to keep these products away from kids.”
The industry response: "The Governor’s proposed Executive Order goes well beyond these reasonable measures. By restricting the sale of regulated hemp products, it fails to address the actual sources of public harm — the unregulated and illicit producers that operate outside of any oversight,” said Thomas Winstanley, the general manager of Edibles.com, one of the largest sellers of hemp products in the US.
“Instead, it penalizes legitimate businesses that comply with state and federal standards and have worked tirelessly to bring transparency and safety to the market.”
The backstory: Intoxicating hemp products contain THC, the chief psychoactive compound in cannabis, but are legally classified as “hemp,” so they are technically legal via the 2018 Farm Bill. But the desired compound, THC, is one and the same.
DeWine’s move comes as the state continues to grow its nascent legal cannabis market, while other states have also rolled out similar bans.
Zoom out: Many states are attempting to curb the proliferation of intoxicating hemp. The Texas state legislature passed a total ban on intoxicating hemp products earlier this year though Gov. Greg Abbott came in with an eleventh-hour veto.
Meanwhile, a federal court upheld a statewide ban in Arkansas in August.
Last month, California’s legislature passed a bill that integrated intoxicating hemp into the state’s existing licensed cannabis market, which restricts the products to licensed cannabis operators. It’s a clear attempt to harmonize the broader cannabis market, and regulate all THC coherently.
At the same time, nationwide companies, such as Cornbread in Kentucky, are increasingly contending with state bans, such as the one that goes into effect in Tennessee next year.
-ZH
📣 Quotable
“Cannabis inversion is one of the gravest threats facing New York’s evolving legal cannabis market. By disguising illicit products as legal, bad actors are exposing consumers to pesticides, contaminants, and false potency claims, all while destabilizing businesses that are diligently playing by the rules," said Herb Barbot, Chair of the Green Standard Alliance and former Director of Operations at the NYS Office of Cannabis Management.
Inversion — the practice of selling illicitly grown or obtained cannabis through the legal, regulated market — continues to plague New York despite the ongoing efforts to license legal operators to replace those who have operated in the grey and illicit market since cannabis was legalized in the state in 2021.
The Green Standard Alliance recently released a white paper on the ongoing threat of inversion.
⏩ Quick hits
Michigan groups sue over 24% cannabis tax hike 💰
The Holistic Research Group and the Michigan Cannabis Industry Association each filed lawsuits in state court challenging the recently approved 24% tax on wholesale cannabis, which was part of the state's latest budget bill. The increase was presented as a means to generate cashflow to improve state roads. Michigan Public has more.
💰 Earnings roundup
Tilray reports a profitable quarter 📈
The Canadian cannabis and alcohol giant reported $1.5 million on net income on $209.5 million of revenue during the second quarter of the year. That’s way up from the same quarter last year, when the company reported a $35 million loss. Tilray’s stock closed Thursday up 22%.
🔬 Science & research
Villanova University study reveals misunderstanding about hemp regulation ⛽
The study found that 87% of Pennsylvanians believe that intoxicating hemp-derived products such as those often found at gas stations are regulated by the state. The results show the ongoing disconnect among consumers between regulations that govern cannabis in legal markets.
📰 What we’re reading