Happy Monday.
Cannabis policy seems to have broken containment last week thanks to the Senate hemp fight. And it was a terrible week for cannabis stocks — $MSOS ( ▲ 1.49% ) fell 16% on Friday, as the market seemed to digest the hemp ban as a bad thing for the industry. Hopefully, bad news only comes once.
Below, read a snippet of co-founder Jeremy’s column in MSNBC on the hemp ban.
Let’s get to it.
-JB, JR, ZH, NM
This newsletter is words or about a -minute read.
💡 What’s the big deal?
HEMP
The Senate’s hemp ban throws the baby out with the bathwater 🛀
Driving the news: America’s attention last week was rightfully focused on the back-and-forth negotiations on Capitol Hill over re-opening the government.
But quietly tucked away within the new funding bill, signed into law on Wednesday, is a ban on hemp-derived THC.
It’s one of Kentucky Sen. Mitch McConnell’s last wishes before departing the Senate. And it’s language that could jeopardize an industry worth upwards of $30 billion, according to some industry estimates — as well as the thousands of jobs it provides. It’s also a brand-new, evolving market that few consumers and retailers seem to fully understand.
Back up: The provision doesn’t apply to state-regulated cannabis industries like those in New York or California. It stems from the 2018 Farm Bill, signed into law during President Trump’s first term, which defined hemp as cannabis containing less than 0.3% THC. But hemp and cannabis are biologically the same plant, and this distinction is purely legal, not scientific.
As federal progress toward cannabis legalization stalled, many companies figured out how to glean enough THC from legal hemp to create intoxicating products. From that loophole, a $30 billion industry blossomed.
Big mainstream retailers like Target and Total Wine have embraced these products. A number of Republicans spoke about their support for the ban in overzealous “Reefer Madness” terms. But lawmakers failed to distinguish between the good actors selling tested, low-dose THC seltzers in established stores, versus the bad, who peddle synthetic THC products, often containing pesticides and heavy metals, through gas stations or bodegas.
In other words, lawmakers who don’t fully understand the issue threw the baby out with the bathwater.
My take: The smarter path is regulating low-dose THC beverages like alcohol while banning synthetics — not eliminating the entire market.
📣 Quotable
What this ban is going to do is it’s going to force all those little players right now into the illegal market,” Curaleaf CEO Boris Jordan told CNBC about the hemp ban signed into law last week.
“Companies have got way too much money invested in this and the demand is still there and growing. They [companies] aren’t just going to go away, they’re just going to go into the illicit market and put more people at risk.”
Curaleaf and Tilray are so far the only two major cannabis companies that have publicly opposed the hemp ban.
⏩ Quick hits
Merkley says Republicans ‘just plain cruel’ on stripping VA rules
Senate Republicans removed an amendment from a spending bill that would have let VA doctors recommend medical cannabis to veterans. Sen. Jeff Merkley (D-OR) called the move “just plain cruel” and said he will keep fighting for veterans. The amendment aimed to ensure veterans could discuss this treatment option with their doctors like any other patient. Read more.
Pennsylvania still working on legalization ⌚
Lawmakers in the Keystone state may have to look toward 2026 before they finally pass cannabis legalization. Despite increased partisan support in the state senate, the legislature omitted legalization from the final budget, which was signed on Nov. 12. A bill that would allow adult-use is technically still in play, but the 2025 legislative session is fast approaching its end.
😜 One fun thing
Minnesota Sen. Tina Smith memed about the hemp ban:
🤝 Deals, launches, partnerships
Despite the federal government starting a 365-day clock until essentially all hemp products become illegal, Milwaukee-based Lakefront Brewery unveiled a new hemp-derived THC lemonade that includes 10mg of THC. The founder says he expects Wisconsin to legalize cannabis.
💰Earnings roundup
Canadian cannabis firm Rubicon Organics reported a $2.8 million net loss on $15.7 million of revenue for the third quarter. $ROMJ.TSX ( 0.0% )
Springbig reported a $200 million profit on $5.9 million of revenue for Q3. $SBIG ( ▲ 19.14% )
📰 What we’re reading
Forget the Trump-signed THC ban. In Texas, hemp is still as legal as ever | Houston Chronicle
Bracing for the fallout from weed tax suspension | Capitol Weekly