Good morning.
The countdown to November’s “hemp ban” is on, but Texas is making moves now.
Let’s get to it.
-JR, CC
Today’s newsletter is 719 words or about a 5-minute read.
💡 What’s the big deal?
TEXAS
Smokable hemp takes a hit in Texas
Individual states continue to implement more hemp restrictions and all-out product bans as looming federal prohibition on most intoxicating hemp products is set to take effect Nov. 12.
In Texas, a ban on smokeable hemp products was enacted March 31 though market watchers are unsure how enforcement will play out, particularly given the proliferation of online sales and convenience store retailers.
Possession of hemp flower is also legal for Texas consumers, adding another challenge to enforcement efforts.
Flower products like pre-rolls, according to the Houston Chronicle, are estimated to account for 25% to 40% of the total legal hemp market in Texas, which has become one of the nation’s largest markets for retail and production of hemp-derived THC products.
Litigation is expected, according to Axios Houston, with arguments likely challenging the authority of the Department of State Health Services implementing THCA thresholds, a move that wasn’t limited by Congress or the state legislature.
The Texas Hemp Business Council, the state’s premier trade group that spent years lobbying for consumer access, broader business opportunities and nongovernment intervention, is expected to file a lawsuit, Axios reported.
What they’re saying: “It is certainly misguided that the government, whether it's lawmakers or regulators, thinks that they are going to pass these rules and expect that the product is simply going to disappear from Texas,” Heather Fazio, director of the Texas Cannabis Policy Center, said to the Houston Chronicle. “Where there's a demand, there's always going to be a supply.”
Following the trend: Several other states are weighing or have approved new hemp laws and regulations, with recent developments including:
New Jersey Gov. Mikie Sherrill signing a bill extending the deadline on hemp drink THC limits and multi-serving containers, per Politico Pro.
The Missouri Senate Tuesday night, according to hoodline, approved a House bill that would outlaw most intoxicating hemp products and tightly limited locations approved to sell low-dose THC offerings. The legislation, slated for enactment Nov. 12, heads back to the House.
State and municipal restrictions have primarily covered inhaled hemp products and concentrates, with loopholes and allowances for beverages, a carve out championed by several national drink brands, the alcohol industry and regional liquor store chains.
-CC
📣 Quotable
“Your neighborhood drug dealer is finally back in business,” Texas cannabis attorney Susan Hays told the Houston Chronicle, referencing the state’s newly enacted ban on smokeable hemp products.
🤝 Deals, launches, partnerships
Vireo Growth Inc. announced the closure of its $47 million acquisition of Eaze Inc., providing a major expansion for the Minneapolis-based company in California, Florida, and Colorado. $VREO.CSE ( ▲ 3.7% )
Eaze Technologies, its predecessor once valued at nearly $700 million when it was donned “the Uber of weed,” filed for Chapter 7 bankruptcy last year and planned to wind down operations. (Eaze was also notably part of Silicon Valley’s opening sequence.)
After a rebrand and $10 million cash infusion, it changed the company name to Eaze, and hired some 1,100 employees in California, Colorado, and Florida, where it has delivery operations and 65 retail locations, according to its website. It’s Florida’s 6th largest dispensary chain with 39 stores.
Under the deal, former Eaze CEO Cory Azzalino will lead California operations for Viero’s wholly-owned subsidiary.
⚖️ Lawsuits
Federal judge Trevor McFadden denied a request from a group of marijuana prohibitionists aiming to block a new program that would allow up to $500 in CBD products covered by Medicare and Medicaid.
The lawsuit, filed by Smart Approaches to Marijuana (SAM) and nine other anti-cannabis groups, is scheduled to be heard on April 20 - the unofficial high holiday, Marijuana Moment reported.
The federal rebate program, which launched April 1, restricts smokeable hemp products, synthetics and other products with more than 3mg or 0.3% THC based on the 2018 Farm Act.
Cultivated reported last week the Centers for Medicare and Medicaid Services (CMS) released new regulatory guidance related to Medicare CBD and other cannabinoid coverage for seniors.