Good morning.
Tune in today at 10 am Eastern on YouTube and LinkedIn as Cultivated sits down with Clint Kellum, the newly appointed Director of the California Department of Cannabis Control, for a conversation on the illicit market, regulatory challenges, and what's next for the largest cannabis agency in the country.
Let’s get to it.
-JB, JR, ZH
Today’s newsletter is 1,197 words or about a 9-minute read.
THIS NEWSLETTER MADE POSSIBLE BY:
💡 What’s the big deal?
CBD
Seniors could get up to $500 in CBD covered by Medicare
The Centers for Medicare and Medicaid Services (CMS) released new regulatory guidance over the weekend that would allow Medicare to cover certain CBD products for seniors.
The update was promised late last year as part of President Trump’s rescheduling executive order. The framework allows for up to $500 in CBD products to be covered by Medicare and Medicaid.
What they're saying: "By reinforcing a science-driven framework centered on safety, quality, and transparency, it creates a clearer path for responsible integration into patient care,” said Charlotte's Web CEO Bill Morachnick in a statement.
“We see this as meaningful progress toward expanding access to trusted, non-intoxicating hemp solutions in a way that aligns with both clinical standards and patient needs.”
New rules: Eligible hemp products cannot be inhalables, and must not contain synthetic cannabinoids or more than 3mg or 0.3% THC based on the 2018 Farm Act. That limit will decrease in November when new hemp restrictions go into place under the 2026 Agriculture Appropriations Act.
The program could start as early as April 1.
The hemp products will have to be provided by a healthcare operator, as participants will not be able to receive reimbursements on products purchased at the retail level. The products must all be lab tested for potency and contaminants.
Zoom out: When Trump signed an executive order calling on the Attorney General to expedite the cannabis rescheduling process, the order also included a provision ordering the creation of a regulatory framework for hemp-derived cannabinoids, such as CBD.
Proponents of the change argue that standardizing CBD guidelines under Medicare and Medicaid would make it easier for patients to carefully use the products safely.
"This patchwork that we're working within now, the laws and regulations, are leaving patients and doctors without adequate guidance on the safeguards of how to use these products, even though they're still being used," said CMS head Dr. Mehmet Oz, when Trump signed the executive order last year.
While it is understandable to take a cynical view on whether cannabis gets rescheduled any time soon, the new CMS rules show that there is at least a little momentum in updating how the federal government treats cannabinoids.
-ZH
📣 Quotable
“This legislation represents a common-sense step toward aligning federal policy with the realities of today’s cannabis industry,” Curaleaf CEO Boris Jordan said, of the reintroduced CLIMB Act, a cannabis banking bill.
“For too long, U.S. operators have been constrained by outdated regulations that limit access to capital and prevent participation in major exchanges. Advancing the CLIMB Act would open the door to deeper institutional participation and oversight, while supporting the long-term stability and maturation of the sector.”
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⏩ Quick hits
The Minnesota Senate sent a bill to the governor's desk that would allow hemp products to be tested by out-of-state labs until May 31, 2027 in order to ease the growing workload on the state's two testing labs amid the rollout of adult-use.
Many cannabis retailers have to go back to cash across the country as bank service providers continue to crackdown on electronic payments, also known as "cashless ATMs."
The Wine & Spirits Wholesalers of America launched a microsite calling for federal regulation of intoxicating hemp beverages modeled on alcohol oversight, arguing that the looming November ban without a replacement framework would drive sales into unregulated online channels rather than eliminate demand.
A new Colorado report shows that retailers in the state had a 99% rate of properly checking IDs, indicating the age gating is working in the state's cannabis industry.
Colorado is considering loosening some of the restrictions on THC beverages ahead of the impending federal intoxicating hemp ban set to take effect this November.
🤝 Deals, launches, partnerships
The Cannabist Company filed for creditor protection under Canada's CCAA Tuesday and announced deals to sell its Ohio operations to Holistic Industries for $47 million and its Delaware assets for $16.5 million, with a non-binding agreement in place to offload six additional state operations, as the company winds down its New York and Pennsylvania businesses entirely. The filing, supported by noteholders holding more than 60% of its outstanding senior secured debt, marks an effective end to one of the cannabis industry's original multi-state operators. $CBSTF ( ▲ 16.4% )
Curaleaf's Select brand launched the Briq 2 vape, featuring proprietary Flavor Protection Technology and a real-time dosing display, rolling out across 13 states beginning March 20. $CURLF ( ▼ 0.2% )
📊 Earnings roundup
Rubicon Organics reported full year net income of C$1.1 million on C$59.5 million in net revenue, or C$0.02 per share, swinging to profitability from a net loss of C$2.6 million on C$48.7 million in net revenue the prior year. $ROMJ.TSX ( 0.0% )
⚖️ Lawsuits
Michigan has asked its state Supreme Court to halt a lawsuit that threatens to end a recently-enacted 24% wholesale tax that cannabis operators say will cause mass closures and reinvigorate the state's illicit market.
⏪ In case you missed it
Carter Lewis of Aquinnah Capital joined Cultivated Live on Tuesday to chat about what he's actually looking for when he underwrites a deal, which states he's targeting right now, and why he built a strategy that doesn't depend on exits.
📰 What we’re reading
Is Wisconsin losing millions to states where cannabis is legal? | Milwaukee Journal-Sentinel
Virginia's cannabis sale start date: The line between competition and exclusion | Richmond Times-Dispatch