States Are Still Missing The Mark On Social Equity

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Economist, Beau Whitney, released a report on the 2024 Cannabis Business Conditions and Sentiment Survey. It states that the legal cannabis industry remains structurally unprofitable for most operators—an issue that disproportionately impacts social equity entrepreneurs. The survey found that only 27.3 percent of U.S. cannabis businesses are profitable, while 40.6 percent are breaking even and 32.2 percent are operating at a loss. Profitability gaps are even more pronounced along racial lines: 33.7 percent of white-owned cannabis businesses reported being profitable, compared to just 17.5 percent of non-white-owned operators. Whitney attributes these outcomes to systemic barriers, including limited access to capital and banking, heavy regulatory compliance costs, and punitive federal tax policy under IRS code 280E, which can push effective tax rates above 50 percent.

The same story keeps repeating over and over again. States launch social equity grants with promises to provide financial, business, and technical support to equity applicants. Time and time again, lives are ruined and dreams broken because there isn’t adequate business planning support to mitigate the risk of failure.

 

BIPOCann Leads In Colorado

Founded in 2020 by Ernest Toney, Colorado-based incubator BIPOCann was created to address this gap, which he saw early in the rollout of social equity cannabis programs around the country, where many states were focused on license access, few invested in the long-term business planning, capital support, and operational infrastructure needed to help equity operators survive beyond launch.

BIPOCann works with minority and social equity entrepreneurs to support the full lifecycle of a cannabis business, from license applications and business planning to capital raising, operational setup, and product launch. Although the organization works with founders nationwide, its core programming is centered in Colorado through a partnership with the state’s Office of Economic Development. Beginning in 2022, BIPOCann helped pilot a model that paired state-issued social equity grants of up to $50,000 with structured mentorship, ecosystem introductions, and technical assistance designed to help founders avoid common pitfalls and accelerate time to market. The program has since expanded from an initial eight-week pilot to a 15-week accelerator, and in late 2025, BIPOCann secured its first state contract. In 2026, the organization expects to support up to 60 Colorado-based cannabis businesses through a year-long combination of structured programming and ongoing advisory services.

Four years into the program, BIPOCann can produce solid data on the efficacy of the program, says Toney, “We’ve worked with over 50 unique social equity licensed businesses and helped some get their doors open, expand throughout the state, expand to multiple states, and last year, a few of our participants were awarded about a quarter of a million dollars worth of investment funds.” He estimated that about 60% are license holders and 40% are service-based businesses seeking support from the BIPOCann program.

Toney also points to the advantages of launching a cannabis brand in a mature market like Colorado. With decades of legal market history, the state already has a dense ecosystem of established operators, retailers, and service providers, giving new brands multiple avenues to promote products and build distribution quickly. That existing infrastructure—from cultivation and manufacturing to storefronts and marketing channels—can shorten the path to market and reduce the typical early-stage friction. By contrast, while newer markets often generate significant excitement, Toney notes that brands entering those markets may face delays as foundational infrastructure is still being built, limiting immediate opportunities despite long-term potential.

 

Financing Remains The Biggest Obstacle

Access to capital remains the most persistent barrier for social equity entrepreneurs. Investment opportunities have largely dried up over the past several years, particularly for first-time founders who lack operating history or personal wealth to self-finance early stages.

Toney says BIPOCann places heavy emphasis on financial literacy, pitch development, and helping founders clearly communicate their brand story. “Ultimately, we want them to be in a position where, at the end of the program, they have a pitch deck to approach angel investors or friends and family,” he says. “Even better is when they can show revenue history to demonstrate business capability.”

The program relies heavily on experienced cannabis professionals who volunteer their time to mentor participants and share real-world operational expertise. That peer-driven support, Toney says, often fills gaps left by state programs that stop short of providing ongoing guidance.

It is unclear why states continue to repeat the same mistakes. Program after program has failed to meaningfully support social equity entrepreneurs beyond the point of licensure. States need to partner with organizations like BIPOCann to implement comprehensive business training programs with ongoing operational oversight, more closely resembling how venture capital firms engage with portfolio companies. Capital alone is not enough.

 

Learn From Past Mistakes

Even in states that have touted early social equity wins, the outcomes have fallen painfully short. New York, for example, successfully awarded roughly 54 percent of adult-use licenses to social equity applicants, but its promise to deliver turnkey storefronts and meaningful financial support ultimately unraveled. The state’s reliance on public-private partnerships, including DASNY and private investment partners, led to delays, cost overruns, lawsuits, and allegations of misconduct tied to how funds were allocated and how executive compensation was structured. For many licensees, the result was months or years of uncertainty rather than the operational head start they were promised, leaving some entrepreneurs carrying rent, legal fees, and licensing costs without ever opening their doors.

California offers another cautionary tale. While the state has distributed hundreds of millions of dollars in social equity grants through local jurisdictions, the support has been uneven, slow to reach operators, and heavily dependent on municipal capacity. Many equity entrepreneurs report receiving funds after critical startup windows had already passed, or without the technical assistance needed to deploy capital effectively.

In Richmond, California, a local equity program illustrates how these breakdowns play out at the municipal level. As reported recently, the city returned more than $1.1 million in state cannabis equity funding after failing to meet reporting requirements, while a separate $600,000 grant allocation has remained stalled, leaving qualified equity applicants waiting more than a year for promised support. In some cases, California grant dollars have helped cover rent or fees, but they have failed to address deeper challenges, such as cash flow management, compliance costs, access to the supply chain, and long-term business sustainability in one of the country’s most competitive cannabis markets.

 

These failures are too common across state and local equity efforts. Access to capital without execution, accountability, or ongoing operational support is not equity. It is a system for failure. States need to partner with organizations like BIPOCann that work hand in hand with entrepreneurs to build viable businesses, not just issue licenses and grants.

The Fight Against New York’s METRC Monopoly Heats Up

By Jason Ambrosino
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There is a growing fear among New York cannabis operators that the lawsuit challenging Metrc’s Retail ID program will “kill track and trace” and return the state to the chaos of inversion and inventory failures experienced last year.

That fear is understandable. It is also wrong.

Retail ID is not track-and-trace. Retail ID is a financing mechanism, and understanding how we arrived at this makes that clear.

How We Got Here

New York did not design its cannabis compliance system around Metrc.

The original seed-to-sale contract was awarded to BioTrack, whose system—like every other mature cannabis jurisdiction—tracked cannabis at the lot and batch level, not the individual retail unit. BioTrack’s New York implementation was fully digital and did not rely on physical RFID-based identifiers.

Under that contract, BioTrack was permitted to charge $0.10 per digital identifier, explicitly tied to:

  • lots,
  • batches,
  • and packages.

That $0.10 was understood to be a cost-recovery fee, intended to help maintain servers and software—not a profit center and not a tax on every gram sold. BioTrack bid and won the contract on that basis.

Then BioTrack exited the market, and Metrc acquired the New York contract.

This is the inflection point that matters.

 

Metrc’s Problem Was Never Safety — It Was Contract Math

Metrc was and is a batch-based company.

In 2024, Metrc announced a new product, Retail ID, a unit-level serialization layer that immediately faced resistance nationwide and has not been successfully rolled out at scale anywhere. New York is the first—and only—state where Retail ID has been made mandatory. Functionally, New York is the test market.

When Metrc stepped into the New York contract, it inherited a system with three immovable constraints:

  • The digital ID fee was capped at $0.10,
  • Physical tag markups were restricted,
  • and the state did not fund ongoing system operations.

At the same time, Metrc introduced physical RFID tagging to a system that had none before. This created a new vendor choke point that did not exist under BioTrack and introduced significant operational and logistical burdens for license holders.

Critically, Metrc could not charge its usual rate for physical RFID tags. The $0.10 fee likely covers little more than manufacturing cost—if that—while licensees pay shipping and handling. The limited contract funding tied to the original bid was nowhere near sufficient to operate a physical-tag-based system at New York’s scale.

The contract, as written and priced, is not economically viable.

Retail ID was the escape hatch.

By pushing a reinterpretation of New York’s pre-established regulatory definitions—specifically expanding “lot” and “batch” to include individual retail units—Metrc could claim it was merely providing the same digital identifier BioTrack once provided, while “giving away” the physical RFID tag. In reality, this reinterpretation transformed the $0.10 digital ID from a marginal cost-recovery fee into the primary revenue driver of the entire contract, multiplied by hundreds of thousands or millions of units.

Retail ID did not emerge from a safety study. It did not follow a recall failure. It was not demanded by law enforcement.

It emerged because the contract could not otherwise be made to work.

 

Track-and-Trace Worked Before Retail ID — and It Still Can

This is the point most operators need to hear clearly:

Track-and-trace does not depend on Retail ID.

Track-and-trace has always relied on:

  • batch integrity,
  • package custody,
  • transfer manifests,
  • physical segregation,
  • and audits.

That is how recalls work in every other state. That is how they worked in New York before Retail ID. That is how they will work if Retail ID is removed.

The inversion and inventory failures New York experienced six months ago were caused by:

  • system transition instability,
  • naming and syntax enforcement errors,
  • and vendor rollout failures.

Retail ID did not prevent those failures. It arrived after them.

 

Retail ID Does Not Improve Recall — It Breaks It

Recalls are population-based.

You recall a batch because it shares:

  • inputs,
  • time,
  • conditions,
  • or contamination risk.

Retail ID atomizes that population into millions of individual records that must later be reassembled during a recall.

That is not precision. That is friction.

If Retail ID were removed tomorrow, New York would still be able to:

  • identify affected batches,
  • identify where they were shipped,
  • identify which dispensaries sold them,
  • and execute recalls faster, not slower.

Retail ID adds no recall capability beyond what batch-level tracking already provides.

 

The Real Cost Is Not $0.10 — It Is Labor

Even if New York paid every penny of Metrc’s fees tomorrow, Retail ID would still be devastating.

Because the real cost is human labor.

Retail ID:

  • multiplies scan events,
  • multiplies error surfaces,
  • multiplies reconciliation work,
  • multiplies training burden,
  • and multiplies audit exposure.

This system inherently favors:

  • large, automated operators,
  • conveyor lines,
  • machine vision,
  • and robotics.

It punishes small businesses, craft producers, and labor-driven operations—the very people New York legalization was supposed to protect.

 

New York is effectively operating as Metrc’s live pilot environment for Retail ID.

Retail ID was announced nationally in 2024. It encountered immediate resistance and has not been successfully deployed at scale elsewhere. In New York, it was made mandatory.

That reality explains:

  • inconsistent guidance,
  • missing or incomplete SOPs,
  • shifting interpretations,
  • and trial-and-error compliance with real inventory at stake.

In most industries, pilot programs are:

  • voluntary,
  • limited in scope,
  • and subsidized by the vendor.

Here, license holders are paying—in money, labor, and risk—to validate a system still being operationally proven.

That is not implementation. That is field testing.

License Holders Are Paying to Generate the Data That Powers the System

Retail ID also fundamentally changes who bears the cost of regulatory infrastructure.

Under this model, license holders:

  • pay per identifier,
  • absorb the labor of scanning and reconciliation,
  • and generate the data that gives the system its value.

That data:

  • trains workflows,
  • validates assumptions,
  • improves vendor tooling,
  • and enables future monetization.

In effect, New York licensees are:

  • financing the system,
  • operating it,
  • debugging it,
  • and supplying its data exhaust—

all while having no ownership stake, no pricing power, and no ability to opt out.

This is not a public utility model. It is private infrastructure built on compulsory participation.

 

Why the Lawsuit Matters

This lawsuit does not threaten public safety. It does not threaten compliance. And it does not threaten track-and-trace.

It challenges a system that forces license holders—especially small businesses—to subsidize a private vendor’s economic shortfall through:

  • per-unit fees,
  • uncompensated labor,
  • and coerced participation.

If Metrc cannot operate under the contract that was bid and awarded, the solution is not to quietly redefine compliance.

The solution is for New York State to fund its own regulatory infrastructure transparently, as other states do.

But even that is not enough, because even a free Retail ID system would still destroy small operators through labor.

 

The Choice in Front of Us

New York has two options:

Keep Retail ID

  • Accelerate consolidation
  • Crush small operators
  • Expand compliance labor
  • Centralize data in a private vendor

Remove Retail ID

  • Preserve track-and-trace
  • Restore batch-based recall
  • Reduce labor burden
  • Protect small businesses

There is no third option that works.

 

Final Thought

Retail ID is not about safety. It is not about recalls. It is not about diversion.

It is about who pays—and how quietly.

If you care about:

  • workable compliance
  • real recallability
  • small and mid-sized operators
  • and a sustainable legal market

This lawsuit deserves your support.

To learn more, ask questions, or get involved, email:  nystrackandtrace@gmail.com

Fear thrives in confusion. This lawsuit exists to replace confusion with facts. More than 20 license holders have already committed to the suit. What are you waiting for?

 

Listen to more of Jason’s insights on the New York market in his interview with the Innovating Cannabis Podcast.

 

This Company Wants Your Dirty Grow Air Filters

By Pam Chmiel
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It is not uncommon for industries outside cannabis to adapt their technologies to address challenges unique to this maturing sector. American Air Filter International (AFF) is one such company, bringing decades of experience in air filtration for critical environments such as pharmaceutical clean rooms, food manufacturing facilities, hospitals, and even jet fuel applications.

According to Nikki Sasher, a microbiologist and head of the Clean Air Laboratory at American Air Filter International, cannabis cultivation facilities face a host of airborne risks, with mold at the top of the list. Once mold enters a grow, the financial consequences can escalate quickly, from destroyed harvests to failed compliance tests. Beyond lost revenue, there are serious biosecurity and worker health concerns tied to inhaling mold spores. In cases where Aspergillus reaches the lower lungs, Sasher notes, the mold can colonize and continue to propagate inside the body.

In 2022, a Trulieve employee died after suffering an asthma attack linked to prolonged exposure to ground cannabis dust in her workplace. Following the incident, OSHA cited the company for failing to implement adequate dust control measures, including proper ventilation and the use of HEPA filtration on vacuum equipment.

Health officials and researchers have since identified a range of respiratory hazards common in cannabis cultivation and processing facilities. These include mold and fungi, pesticides and chemical residues, and terpenes and other volatile organic compounds. Many of these compounds create strong odors and can interact with other airborne agents to form irritants that pose both acute and long-term health risks.

These incidents present a growing safety and occupational health challenge within the rapidly expanding cannabis industry, one that is increasingly difficult to ignore.

 

Filtration Is Not Yet an Industry-Wide Standard

Despite these risks, comprehensive air filtration is far from universal across cannabis operations. Sasher explains that geography plays a role. Drier climates, such as Nevada, tend to experience fewer mold issues than states like Michigan, Colorado, and New York, where temperature swings and higher humidity create ideal conditions for microbial growth.

Greenhouses, in particular, present ongoing challenges due to constant water activity created by irrigation systems and plant respiration. Sasher frequently sees mold outbreaks occur in drying rooms, where freshly harvested plants retain moisture. If mold is already present in the room or circulating through the air handling system, spores can easily settle onto wet plant material. Drying rooms are typically smaller and more enclosed than other areas of a cultivation facility, making them among the highest-risk environments in the entire operation.

The use of high-tech air filtration systems has only been around for less than twenty years; some sectors still need to catch up to the standards required in food and pharmaceutical manufacturing, such as adhering to minimum efficiency ratings, change-out intervals, locations, first-in, first-out process flow, and hazard analysis.

 

AFF Wants Your Dirty Filters

To spark greater industry awareness around the benefits of proper air filtration, American Air Filter International has launched a free filter-testing program for cannabis cultivators. Through the initiative, growers are invited to submit used air filters from their facilities, allowing AFF to analyze real-world contamination and build a clearer picture of airborne risks across the sector.

According to Sasher, the filters are evaluated for efficiency, resistance, and pressure drop, as well as downstream mold capture to determine what is circulating in process-facing air. AFF also uses scanning electron microscopy to examine the filter media at the microscopic level, revealing how particulate matter, such as mold spores, dust, and plant material, accumulates and impacts performance over time.

To expand the scope of the research, AFF has partnered with Dr. Alison Justice of the Cannabis Research Center. Together, the organizations are collecting data that will help quantify air quality risks and translate them into practical guidance for cultivators.

 

Exposed Areas in Cultivation Facilities

Modern cultivation facilities rely on complex climate control systems that include HVAC units, humidifiers, and dehumidifiers, each requiring filters with different efficiency ratings. Sasher notes that many of the filters currently in use fall below recommended standards, a gap AFF hopes to validate through its research partnership with the Cannabis Research Center. The goal is to help growers better understand which efficiency ratings are needed in different parts of the facility to meaningfully reduce risk.

Mold spores, Sasher emphasizes, are ubiquitous. Air filtration is only one engineering control among many, alongside practices such as room fogging and sanitation protocols. Once mold is introduced into a facility, it can be extremely difficult to eliminate.

One uniquely cannabis-specific challenge is the presence of trichomes. These microscopic, sticky particles easily become airborne during cultivation and processing, where they accumulate on filters, restrict airflow, and degrade filtration performance. As part of the testing program, AFF is evaluating how sticky versus non-sticky particulate matter affects filter lifespan and efficiency. The findings could help growers better determine optimal change-out schedules and identify operational factors that accelerate filter failure.

For Sasher, biosecurity is the most compelling reason to invest in proper air filtration. Through its collaboration with Dr. Justice, AFF aims to merge air quality science with cultivation expertise to produce data-driven research that the industry currently lacks. The partnership is focused on developing practical guidance around filtration standards, airflow management, preventative maintenance, and standard operating procedures, areas where formal benchmarks are still largely absent.

Looking ahead, the research team plans to identify pilot cultivation sites where filtration can be evaluated directly within active grow environments. By measuring conditions before and after filtration upgrades, they hope to quantify the impact on contamination levels and overall plant health. Sasher points to similar work in agricultural settings, where improved air filtration reduced livestock mortality rates by double digits, delivering measurable economic gains.

While cannabis-specific results will take time, Sasher believes the approach has the potential to deliver actionable insights that the industry can implement quickly. Even cultivators who are not using AFF products, she says, will be able to apply the findings to strengthen biosecurity, protect workers, and reduce costly crop losses.

 

Beyond Particulates: Managing Odors and Emissions

While much of the focus in cultivation facilities centers on particulate filtration, Sasher emphasizes that molecular, carbon-based filtration plays an equally important role in cannabis operations. These systems are designed to scrub gases and volatile compounds from outgoing air, an increasingly critical requirement as cultivation and extraction facilities operate closer to residential and commercial neighborhoods, and as consumption lounges come online.

In cannabis, terpenes are responsible for strong odors, as well as gases released during extraction processes that use hydrocarbons such as butane. These gas-phase emissions are subject to strict environmental and safety standards, particularly in regulated markets where operators are required to control odors and limit volatile organic compound emissions.

American Air Filter International addresses this challenge through a dual filtration approach. Pleated particulate filters support plant health and worker safety by capturing airborne contaminants within the facility, while carbon-based molecular filtration systems target gas-phase pollutants before exhaust is released outdoors. Together, these systems help operators remain compliant with local regulations while reducing environmental impact.

Sasher also points to a key differentiator in AFF’s gas-phase filtration program: the ability to test and monitor the remaining life and gas-holding capacity of carbon filters. By measuring remaining adsorption capacity, AFF provides operators with data-driven guidance on when to replace filters. This reduces guesswork, prevents performance failures, and supports more predictable maintenance schedules.

 

As regulators, communities, and workers place increasing scrutiny on air quality, molecular filtration is becoming a necessary extension of cultivation and extraction infrastructure rather than an option. As the industry inches toward rescheduling and ultimately descheduling, GMP-certified facilities will be required, and with that comes clean-air filtration.

CONTACT NIKKI SASHER IF YOU WOULD LIKE TO PARTICIPATE IN THE FREE AIR FILTER STUDY: nsasher@aafintl.com

Listen to Nikki Sasher’s full interview on the Innovating Cannabis Podcast.

Excerpts From President Trumps Historic Executive Order

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Below are excerpts from the conversation at the White House press conference where President Trump signed an Executive Order to move marijuana from a Schedule 1 controlled drug to Schedule III.

President Trump: Well, it was a big day, and many reasons, really, for many reasons, and I have a very distinguished group of people behind me. Mostly medical people and brilliant people, and they really know what they’re doing. And I want to thank them. They truly gave their lives in terms of the time and all of the incredible work they’ve done over the years in arriving at the position they have now, the most respected people in the country. Today, I’m pleased to announce that I will be signing an executive order to reschedule marijuana from a Schedule 1 to a Schedule III controlled substance with legitimate medical uses.

We have people begging me to do this. People who are in great pain.

For decades, this action has been requested by American patients suffering from extreme pain, incurable diseases, aggressive cancers, seizure disorders, neurological problems, and more, including numerous veterans with service-related injuries, and older Americans who live with chronic medical problems that severely degrade their quality of life.

I can’t tell you; I think I’ve probably received more phone calls about this… Hopefully, this reclassification, which, by the way, polls at 82%.

It will help many of those patients live a far better life.

We’re joined today by Secretary Robert F. Kennedy, Jr, who’s doing a fantastic job, Administrator of Centers for Medicare and Medicaid Services, Dr. Mehmet Oz, the FDA Commissioner, Dr. Marty Makary, Director of the National Institutes of Health, Jay Bhattacharya, the Director of the National Institute on Drug Abuse, Dr. Nora Valkyo, as well as Dr. Ilana Braun from the Dana-Farber Cancer Institute, Duke University’s Dr. David Casarett, the National Commander of the American Legion, Dan Wiley, and my friend Howard Kessler.

 

“I want to emphasize that the order I am about to sign is, not the legalization or it doesn’t legalize marijuana in any way, shape, or form, and in no way sanctions its use as a recreational drug. This nothing to do with it.”

 

Just as prescription painkillers may have legitimate uses, they can also do irreversible damage, if you look at some of the damage that can be caused, wreck lives if they’re abused. It’s never safe to use powerful controlled substances in recreational manners.

I’ve always told my children, Don’t take drugs, no drinking, no smoking. And just stay away from drugs. They would look at me, and they would say, Dad, would you stop saying that? I would say it every time I looked at them, practically. Young Americans are especially at risk, so unless a drug is recommended by a doctor for medical reasons, just don’t do it.

 

“At the same time, the facts compel the federal government to recognize that marijuana can be legitimate in terms of medical applications when carefully administered in some cases.”

 

This may include the use as a substitute for addictive and potentially lethal opioid painkillers that cause tremendous problems. Marijuana can help in a less risky way and make people feel much better.

Forty states and multiple U.S. territories have already recognized the use of medical marijuana.

 

“This reclassification order will make it far easier to conduct marijuana-related medical research, allowing us to study benefits, potential dangers, and future treatments. I believe it’s going to have a tremendously positive impact.”

 

“We’re also asking Congress to reconsider its classification of hemp-derived CBD to ensure seniors can access CBD products they have found beneficial for pain and other reasons.”

 

Some people are literally dying with tremendous pain, and this can, in many cases, literally stop it, and they can have their senses about them, as opposed to painkillers, which don’t allow that, don’t allow them to die with dignity, frankly.

I promised to be the President of common sense, and that is exactly what we’re doing. This is really about common sense, and it’s that many people I respect ask me to do it.

People are having problems, big medical problems. They are having big problems with illness, with cancer in particular.

I would now like to invite Dr. Oz to say a few words, followed by Dr. Braun, Dr. Cassarette, Dan Wiley, and Dr. Valkow.

 

“And, we’ll sign the order as soon as they complete their statement.”

 

Dr. Oz: Mr. President, thank you for always bravely pushing for common sense change, as you call it. So, President Trump and Secretary Kennedy have been pushing for change, their passion, their desire to help the American people, and they have relentlessly pursued this agenda throughout this administration. This also includes a deep passion for research. Gold standard research, as Secretary Kennedy also says.

But there’s another side to the President that often isn’t reflected in media reports: his deep passion for the people in his life. And he has called me frequently about the people who are calling him, as he alluded to, saying they have problems and have found relief from some of the solutions we’re discussing today. Howard Kessler, who’s standing behind me here, who’s a mutual friend of ours, was an early caller of the President. Many others have reached out as well. And Howard’s been a passionate advocate for avoiding narcotics, especially in seniors, and particularly seniors suffering from cancer.

And that’s a population that is a very important one, and it’s a sympathetic population that’s, like, that’s desires for trying new ways, besides some of the conventional approaches that have been tested by pharmaceutical companies, but have untoward side effects at the beginning of the year.

One of the first things the President told me, he doesn’t actually tell you, he’d demand from me, that my agency, CMS, use all the tools at his disposal to find a better way to help seniors. A passion for a population that has been left behind in these discussions. I promised that we would find an answer, even though it had not been done before, and today we are delivering on that promise.

 

“Today, our Innovation Center at CMS is announcing a new model and additional actions to give seniors access to cannabinoids.”

 

These are CBDs, and they’re not addictive, which many are already using to manage pain. There’s some clinical evidence that shows that CBDs provide relief from common conditions that affect Americans, including cancer symptoms, chronic pain, and a slew of other problems that disproportionately affect seniors and our veterans. And 6 in 10 people who use the CBDs report that they improve their pain. I think all of those people are judging the President based on the number of calls supporting what we’re doing today. And sometimes these decisions are difficult, and there’s a reason this hasn’t happened before, and there’s a reason, Mr. President, that every President before you has whiffed on this issue. It’s tough. And I know there’s going to be a lot of discussion about it, that’s why we’re so passionate about making it clear that this patchwork that we’re working within now, the laws and regulations, they’re leaving patients and doctors without adequate guidance on the safeguards of how to use these products, even though they’re still being used.

 

“At Medicare, we cover 68 million Americans, including people under the age of 65. And they did not have a way of providing these treatments until today. With the President’s insistence, that all changes. The Innovation Center models are going to allow millions of Americans on Medicare to become eligible to receive CBD as early as April of next year, and at no charge, if their doctors recommend them.”

 

Thanks to the hard work of the entire CMS team, especially Abe Sutton and Gita Dio at the Innovation Center, accountable care organizations in this country working in Medicare will be able to provide these products again at no cost to patients.

 

“Medicare Advantage insurers, and we’ve been calling them, are also agreeing to consider CBD to be used for the 34 million Americans that they cover. If you can hear my voice and you’re over 65, you should pay attention to this executive order, because it’s going to touch your life.”

 

“Again, this all becomes active after the first quarter of next year. These CBD products must first meet local and state quality and safety standards. They must come from legitimate sources. They must abide by the other regulations of those states. With these boxes checked, patients can be eligible for up to $500 of hemp-derived products each year. This is the first government-led testing of quality and outcomes for patients across different conditions, and it delivers on the need for more data collection and research into hemp usage.”

 

“CMS is going to collect data, that’s our job, on the patients that are being given these products by their physicians, and in accordance with all the privacy and security regulations, we’re going to analyze that data, we’re going to make it publicly available to everybody to be able to analyze with us. If it shows promise, we will expand access to these products to even more conditions amongst Medicare and Medicaid beneficiaries. “

 

FDA Commissioner, Dr. Marty Makary: We want a lot of companies that are doing this research to approach the FDA for formal approval. That is the right way to move forward. And Jay Bhattasharia, who’s hiding in the back, he rarely hides, but Jay runs NIH, and he’s agreed to support initiatives to study the data that we’re collecting.

 I thank you again, from the bottom of my heart, for taking a difficult stance. Thank you very much.” Mr. President, members of the Cabinet, thank you so much for the opportunity to be here, and for your leadership in rescheduling cannabis from Schedule 1 to Schedule 3.

“This decision will accelerate scientific research and expand what can responsibly be studied.”

 

I’m Dr. Ilana Braun, a cancer psychiatrist and medical cannabis researcher at the Dana-Farber Cancer Institute. Over the past decade, federal investment in research has helped transform cancer care. People are living longer than ever before. But cancer care is not only about treating the tumor, but it’s also about addressing the anxiety, the fear, the stress that can come with a diagnosis, symptoms that can interfere with treatment and make recovery much more difficult.

Many medications we use for acute anxiety carry significant risks, particularly in older adults. That’s why we’re studying specific natural compounds found in cannabis, including the non-addictive cannabidiol, to understand whether they can safely and effectively help manage anxiety during cancer treatment. Rescheduling allows us to ask these questions rigorously about dosing, about safety, and who may benefit most.

“This research reflects the best of federal investment, helping people not only live longer, but live better. Thank you, Mr. President, for supporting careful, science-based research that puts patients first. Thank you. Thank you, Doug.”

 

Duke University’s Dr. David Casarett: “I’ll add my vote of thanks, Mr. President. I never really thought this day would come. I met a patient about 20 years ago, a retired professor named Elizabeth, who came to my clinic. She was dying of pancreatic cancer, and she asked me then whether cannabis might help her. And I said no, because that’s what I learned in medical school. She reached into her briefcase, took out a 3-inch tall stack of articles, put them down on my desk, and said, “Really? Doctor? You should read these. You might learn something.” I read every single article; I found several more, and I learned something. I learned that there actually is some medical benefit to cannabis that I had not anticipated, never heard about in medical school.

Second, I learned that there was a lot we don’t know. And third, I learned it’s really, really, really difficult to do high-quality, randomized controlled trials of a substance that’s federally illegal.

 

“Rescheduling has the potential to change all of that, and to rewrite the way that we do research related to cannabis in the United States in three ways. First of all, it’ll democratize the research process so that all academic institutions can participate in research, not just elite academic medical centers. Number two, it’ll give patients and researchers access to highly refined, reliable sources of cannabis, rather than relying on one or two sources around the country. And last but not least, it’ll let us do the sorts of large-scale randomized controlled trials that we do in oncology and cardiology. Not dozens of patients, but hundreds or thousands of patients. That’s how we learn, that’s how we produce valuable knowledge that’s useful in guiding treatment decisions.”

 

Mr. President, I am Dan Wiley, National Commander of the American Legion, representing 1.5 million veterans. We are the largest veterans organization. We have 2.5 million members of our American Legion family. Thank you for your leadership on this issue. This issue is extremely important to the American Legion, and I want to thank you on behalf of the veterans who will benefit from the research. I also want to thank you for your VA Secretary, Secretary Collins, and his work on difficult veterans issues with us this past year. The VA has worked with us on our mission to fight the epidemic of veteran suicide.

 

“Veterans are disproportionately affected by conditions such as PTSD, TBI, depression, and chronic pain. And with this reclassification, it will allow research to be conducted with regard to cannabis. There is anecdotal evidence that cannabis benefits these conditions, and now we’ll have an opportunity to see if research does prove that it is effective.”

 

And if it is so, then it’ll open up a whole new method of treatment for our veterans with regard to this particular issue. And so, again, I just want to thank you for your leadership and, on behalf of the American Legion, for this executive order, which will help the many people who have suffered and will suffer much less now.

 

I’m Nora Volkow, I’m the Director of the National Institute on Drug Abuse, and for us, rescheduling accelerates the rate at which we can conduct research and discovery. And research is crucial in order for us to, for example, understand what may be, and for whom, the dangers of cannabis. Yes, cannabis can be addictive, and adolescents and children may be the most vulnerable. Still, we cannot close our eyes to research and the opportunity that we are hearing from patients, that for some of them, cannabis can solve their problem.

So, first, we need to conduct research to understand those conditions. Number two, in order to be able to learn how to use it optimally, and to understand, number three, what is the danger? And it is knowledge that will allow us to benefit optimally.

Take the benefits behind cannabis, as research shows, but on the other hand, enable us to do prevention interventions to protect those who are most vulnerable.

Secretary of Health and Human Services, Robert F. Kennedy, Jr.: Mr. President, thank you for your leadership and vision, and for finally reaching a closure on this issue. This is a scientific question that has divided our country for many years, and there are valid claims on both sides. On one side, the patients and physicians attached to cannabinoids and THC can have miraculous effects on chronic pain, on epilepsy, on PTSD, and on chemotherapy-induced nausea.

My friend Howard Kessler, without whom we wouldn’t be here today, has driven this change in the schedule because of his experience mitigating the impacts of chemotherapy; he has nothing to gain from this. He saw something that worked for him and thousands of other Americans, and he wants to make it available to them.

On the other side, there are valid claims about the negative impacts, about addiction, about psychosis, about adverse public health impacts, and impacts particularly on young people, which we haven’t been able to verify. The evidence on all of these is anecdotal and hypothetical because we have not been able to do scientific studies. There is no standardized dosing. And if you don’t have standardized dosing, any study that you do is comparing apples to pears. We don’t know the difference between botanicals and synthetics, and we’ll now be able to answer all of these questions.

The prior administration promised to act on this issue. The Biden administration promised to do this, but the proposal became mired in chaos, inertia, and disorganization. I want to thank President Trump, who promised during the 2024 election that he would come in, solve this issue, and take decisive action, and he has kept that promise today. Thank you, President Trump, for your vision; as a result, we will have answers very soon. This will finally allow us to study this issue and to answer these questions for the American people.

Howard Kessler: I just want to help people 65 and over and make a difference in their lives. And we have machines and talent that could do it, not in 8-year clinical trials, but in a year. We’re going to prove that, and it may change the way healthcare works. So thank you, Mr. President.

 

President Trump, as he signed the Executive Order to move marijuana from Schedule I to Schedule III, said, ” It’s an honor to do this.”

 

 

Trump Reschedules Cannabis!

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The moment many in the cannabis industry have been waiting for has finally arrived. Operators, investors, and advocates are cautiously celebrating President Trump’s executive order directing the Department of Justice to finalize the rescheduling of cannabis to Schedule III, an action many hope is a stepping stone toward full federal descheduling.

Full descheduling would free the industry by treating cannabis like alcohol or tobacco by eliminating federal scheduling, ending arrests, removing state vs. federal silos, and enabling interstate and international trade. This would allow national supply chains, economies of scale, access to banking, and provide greater appeal to institutional investors.

Industry Caution

Not everyone in the industry is celebrating. Josh Kesselman, publisher of High Times and founder of RAW® Rolling Papers, warns that rescheduling could introduce new federal risks for state-legal operators.

“I, among others in the industry, am very concerned that this rescheduling could be a false flag,” Kesselman says. He argues that moving THC to Schedule III could allow large pharmaceutical companies to dominate the market with synthetic THC products available only by prescription, while exposing dispensaries and cultivators to a new category of federal criminal liability under the Food, Drug, and Cosmetic Act (FDCA).

Kesselman cautions that businesses could face charges including selling a prescription drug without a license, dispensing without a prescription, misbranding a drug, illegal distribution, and conspiracy. “In fact,” he adds, “the penalties under Schedule III actually increase, not decrease, depending on what a federal prosecutor chooses to charge a seller or grower with.”

 

The Case for Patients and Veterans

Harrison Bard, CEO and co-founder of Custom Cones USA and DaySavers, sees rescheduling as a long-overdue recognition of cannabis as a legitimate therapeutic option—particularly for veterans.

“For years, veterans have faced stigma, inconsistent access, and significant out-of-pocket costs managing chronic pain, PTSD, and other service-related conditions,” Bard says. “Veterans have carried the weight for the rest of us. It’s time our policies—and our industry—carry some of it back.”

Gennaro Luce, founder and CEO of CannaLnx, echoes the sentiment but emphasizes that rescheduling alone is not enough to improve patient access.

“Moving cannabis to Schedule III is an important step,” Luce says. “But without insurance verification, compliance, and eligibility frameworks, patients will still struggle to receive coverage for medical cannabis.”

 

The Biggest Impact of All

Financial executives see both promise and caution in rescheduling.

Terry Mendez, CEO of Safe Harbor Financial, notes, “Reclassifying cannabis as Schedule III acknowledges its medical legitimacy and corrects decades of misguided federal policy, but rescheduling is not reform.” Compliance burdens, cash dependency, and Bank Secrecy Act obligations would remain, keeping many financial institutions cautious.

Anthony Coniglio, CEO of NewLake Capital, highlights one immediate benefit tied to rescheduling: relief from the financial constraints that have distorted cannabis operators’ balance sheets for years. “This isn’t about legalization,” he says.

Adam Stettner, CEO of FundCanna, agrees. “Eliminating 280E changes the math overnight,” he says. “It also accelerates research, encourages standardized formulations, and nudges the industry toward institutionalized compliance and reporting.”

Headset’s latest analysis shows that while the U.S. cannabis industry continues to grow in consumer demand, it is operating under increasing financial strain. Retail margins have compressed significantly—falling from 52.6% in 2021 to about 42.7% year to date in 2025—leaving operators focused on cash preservation rather than expansion. This pressure does not stop at the retail level; it ripples across brands, distributors, and service providers that depend on healthy retail purchasing and payment cycles.

At the center of this strain is Section 280E, which prevents many cannabis businesses from deducting ordinary operating expenses for federal tax purposes. Headset’s modeling of more than 2,100 stores across 24 states shows that under the current 280E treatment, the median retailer in nearly half of those states operates at a negative after-tax profit. In some markets, federal tax obligations exceed total net profit, constraining hundreds of thousands of dollars per store each year and increasing fragility throughout the supply chain.

If cannabis is rescheduled to Schedule III and 280E is removed, the impact on cash flow could be substantial. Headset estimates that the typical median retailer would recover roughly $268,000 per year in federal tax drag, with high-volume stores seeing as much as $805,000 annually. At the industry level, this translates to an estimated $1.6 billion to $2.2 billion in incremental after-tax cash flow at current sales levels.

While retailers would feel the most immediate relief, Headset notes that the broader ecosystem would benefit through more consistent inventory purchasing, improved payment timelines for brands and distributors, increased investment in marketing and product innovation, and greater operational stability. For an industry supporting roughly 425,000 full-time equivalent jobs, improved cash flow is less about rapid expansion and more about sustainability—supporting restored hours, reduced turnover, and long-term reinvestment.

The Case for Small Businesses

Small operators see rescheduling as a potential lifeline.

Levar Thomas, co-founder of CPG brand Silly Nice, says, “Access to banking and meaningful tax relief could finally level the playing field.” He emphasizes that rescheduling makes funding, scaling, and basic compliance far more achievable, and hopes it will accelerate expungements and releases for those still incarcerated.

 

Nonprofits and Social Justice

Betty Aldworth, co-executive director of MAPS and chair of the Marijuana Policy Project (MPP), cautions that rescheduling alone will not undo the harms of prohibition.

“Rescheduling is a symbolic victory,” Aldworth says. “But cash-only operations remain dangerous, consumers still face housing, immigration, and workplace risks, and patients lack regulatory clarity for insurance coverage.” She adds, “Cannabis policy must catch up to political reality. Anything less isn’t reform—it’s delay.”

 

What Does Implementation Look Like?

Cannabis Regulations Association (CANNRA) submitted a comment on the proposed federal rule rescheduling marijuana, highlighting the process that still needs to happen once President Trump flips the switch. They stated that the comment does not take a position on rescheduling, but rather focuses on the implementation of the proposed federal rescheduling in U.S. states and territories.

The comment calls for additional federal guidance in six areas to support state and territorial regulators in being able to implement the policy:

1. Guidance is needed on how federal priorities, including enforcement priorities, will change under the proposed rescheduling.

2. Guidance is needed on how federal agencies will engage with states and territories under the proposed rescheduling.

3. Guidance is needed on how state governments can interact with each other under the proposed rescheduling.

4. Guidance is needed on how research processes and protocols will change under the proposed rescheduling.

5. Guidance is needed on how to regulate cannabinoids that appear in two different places on the schedule due to the federal legalization of hemp.

6. Guidance is needed on how the proposed rescheduling will impact banking and finance directives and policies.

Global Impact

Even short of full descheduling, U.S. policy shifts are already resonating globally. JP Doran, CEO of Crucial Innovations Corp., notes, “While rescheduling stops short of legalization, it reduces research barriers, modernizes oversight, and formally acknowledges medical value.”

Because the U.S. is the world’s largest pharmaceutical market, this move may prompt regulators in the UK, EU, South Africa, and other markets to reassess outdated frameworks, harmonize quality standards, and expand patient access. “As global markets respond, rescheduling has the potential to accelerate the development and distribution of next-generation cannabis medicines,” Doran adds.

 

Looking Ahead

 According to multiple reports, Trump also plans to establish a federal commission by summer 2026 to study full descheduling as “phase two,” signaling that additional reforms could follow the initial administrative action.

Vince C. Ning, co-CEO and co-founder of Nabis, says. “The next transformation comes when interstate commerce barriers fall, allowing a national cannabis infrastructure to scale responsibly, innovate faster, and deliver safer, more efficient access for consumers.” As Ning puts it, “This is a watershed moment. Now it’s up to operators, advocates, and policymakers to sustain momentum and shape what comes next.”

READ EXCERPTS FROM THIS HISTORIC PRESS CONFERENCE.

Mid Atlantic States Gather For The Accelerate Cannabis Summit

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There was no more fitting venue for a cannabis industry gathering than the Museum of the American Revolution in Philadelphia. The historic setting served as the backdrop for the Accelerate Cannabis Summit, a groundbreaking event that brought together cannabis leaders, entrepreneurs, and government officials from across the Mid-Atlantic to share insights and lessons learned from building and regulating their respective markets.

Hosted by Philadelphia-based consulting firm Longview Strategic, the summit marked a turning point for the East Coast cannabis industry, which has long looked to more established states, such as Colorado, California, Oregon, and Washington, for guidance and direction. For the first time, neighboring states with shared cultural similarities, such as Maryland, Delaware, New Jersey, Virginia, and Pennsylvania, came together to collaborate, compare approaches, and strengthen the regional ecosystem.

Ellie Siegel, CEO of Longview, explained that the goal of hosting the summit in Philadelphia was to create a central meeting point for Mid-Atlantic states to exchange ideas about their cannabis programs. For Pennsylvania in particular, which is inching toward a regulated adult-use market, the event offered lawmakers a valuable opportunity to learn from nearby states.

Unlike the West Coast, the East Coast faces a different set of cultural and economic challenges. Densely populated states with diverse urban and rural regions face complex regulatory, real estate, and equity issues that are unique to this side of the country. The summit serves as a catalyst for the East Coast to create its own playbook that reflects its communities, rather than comparing them to California or Colorado.

Regulators from Virginia, Delaware, Maryland, and New Jersey shared insights about their respective market launches, challenges, and successes. The dialogue helped states learn from one another about what worked, what didn’t, and how to ensure more stable, efficient rollouts. Siegel emphasized that bringing regulators and operators together in one room helped initiate connections that will support future cooperation.

Jacob Robbins of Longview Strategic explained that advocacy groups based in Harrisburg, such as the Pennsylvania Cannabis Coalition (PCC) and others, are doing the critical work of lobbying and outreach. Accelerate Cannabis, by contrast, fills a different gap by creating a “midpoint” where stakeholders from across the region can collaborate and build relationships.

Philadelphia, Robbins added, is the ideal meeting ground: “New Yorkers won’t go to Baltimore, and people from Western Maryland won’t go to Trenton, but everyone will come to Philly. It’s the sixth borough.” That centrality allows the event to attract a diverse mix of attendees and inspires the kinds of intimate, cross-state connections that ultimately drive the industry forward.

 

Pennsylvania on the Verge

While Philadelphia has long decriminalized cannabis and built a robust medical market, the statewide program has plateaued. Medical dispensaries are plentiful, but patient numbers have declined as consumers cross state lines for adult-use access in neighboring markets. Many operators invested early in high-value retail locations designed to convert easily to adult use, but the wait has become financially straining.

Competition is fierce: the underground market remains active, and intoxicating hemp products have added a disruptive twist. Shops selling hemp-derived THC products, often at half the price of regulated medical cannabis, are cutting into sales and eroding the patient base. This dynamic has created pent-up energy among Pennsylvania’s operators, who are ready for the adult-use transition but stuck in political limbo.

Two bipartisan adult-use bills—the Street-Laughlin and Kinkead-Major proposals—are currently vying for support. Both proposals reflect the growing momentum in Pennsylvania to legalize adult-use cannabis with frameworks that emphasize equity, public health, and economic benefits. They also illustrate bipartisan support with detailed regulatory and social justice components. Both would create a new cannabis commission, transferring oversight from the Department of Health to an independent agency. Despite strong backing from Governor Josh Shapiro, partisan gridlock in the Republican-controlled legislature has stalled progress.

Still, momentum is building. Advocates believe that political fatigue and public demand will force movement by 2026. Until then, industry leaders continue to work toward destigmatization, hosting professional events, and fostering dialogue that highlights both the market’s sophistication and the opportunity waiting for full legalization.

 

Neighboring States Weigh In

The day began with a fireside chat between Roz McCarthy, founder of Minorities for Medical Marijuana, and Bill Caruso, managing director at Archer Public Affairs and a key architect of New Jersey’s legalization framework. Their discussion set the tone for a day focused on practical problem-solving and cross-state learning.

A panel on “Legalization in Newer Markets” featured Joshua Sanderlin, head of Delaware’s cannabis program, and Courtney Davis, director of Maryland’s Office of Social Equity. Sanderlin shared updates on Delaware’s regulatory evolution, including plans for another lottery round in 2026 to support applicants who were unable to move forward in the initial phase.

Davis highlighted Maryland’s proactive approach to supporting its social equity licensees through technical assistance, financial education, and direct introductions to banks and consultants. Her office is also developing an incubator space to help guide new entrepreneurs in the business planning and execution process that often hinders startups in the cannabis sector.

The session also spotlighted Kent Reserve, Maryland’s first social equity licensee to open its doors, and how the industry can support and stand up for those who suffered under the war on drugs. Maryland’s requirement for GMP-certified facilities, uncommon in other states, was noted as a forward-thinking step that positions the state for future national or international trade.

Collectively, these border-state conversations reflected a spirit of progress and collaboration that distinguishes the Mid-Atlantic region. As Robbins noted, “the proof is in the pudding”—real change happens when regulators, advocates, and business leaders come together to learn from one another and build a more harmonized cannabis industry from the ground up.

Drug Policy Alliance Founder Fires Up The Audience At The Business of Cannabis Event

By Pam Chmiel
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The highlight of the Business of Cannabis event, held at the Wythe Hotel in Williamsburg, a hip neighborhood in Brooklyn, New York, was the keynote speaker. Ethan Nadelmann, founder of the Drug Policy Alliance, has since retired from his position but continues to mentor and serve on the board of Green Thumb Industries. He kicked off the afternoon panels with a fiery address that had the audience cheering him on.

 

“I’m guessing the vast majority of you have no idea who I am. Simplest way to say it is, I’m your fucking daddy, and you don’t even know.”

 

The crowd erupted with laughter as Nadelmann launched into a passionate reflection on his three decades leading the fight to end marijuana prohibition. He reminded the room that before there was an industry, there was a movement built on outrage, principle, and justice.

He recounted how, in 1996, he helped lead the campaign that made California the first state to legalize medical marijuana, and later founded the Drug Policy Alliance to fight the broader drug war and reframe addiction as a health issue rather than a criminal one.

 

“I didn’t do this for the industry,” he said. “I did it because I was pissed off—pissed that people were being arrested, discriminated against, lied to, and locked up for smoking a plant.”

 

He explained that the legalization movement was not driven by corporate interests but by philanthropists and activists from across the political spectrum who believed Prohibition was unjust. “From 1996 to 2016,” he said, “the role of industry in funding reform was almost zero.”

Nadelmann reflected on how unimaginable today’s market once seemed. In the 1980s, only 23 percent of Americans supported legalization. Dispensaries were not even a concept when he began organizing. “We knew marijuana had legitimate medical value,” he said, “but we had no idea how incredibly diverse this could become.”

Turning to the present, he noted that “half the country is now legal,” citing Virginia’s recent progress and growing optimism in Florida and Pennsylvania. “I know most of you focus on New York and New Jersey,” he added, “but I’m a big-picture guy.”

He warned that unresolved federal issues could reshape the industry overnight, particularly the ongoing debate around intoxicating hemp products. “Do we know what’s going to happen with the Farm Bill and that loophole? Will the whole thing be turned upside down? And if they close the Farm Bill loophole and allow the hemp beverages, will they actually enforce it?”

Nadelmann questioned whether hemp and cannabis markets might inevitably merge, given that THC from hemp and cannabis is virtually indistinguishable. “In blind tests, people cannot tell the difference between cannabis products and the hemp THC stuff,” he said. “From a health perspective, when they’re properly regulated, there is no difference. Doesn’t it seem inevitable that the markets are just going to eventually merge?”

He also raised concerns about price compression, competition, and the potential for market consolidation. “Is New York going to become like Michigan? Are we going to see a race to the bottom in terms of price?” he asked, noting that while the illicit market may eventually decline in a well-regulated system, its persistence continues to complicate state programs.

Reflecting on broader economic trends, Nadelmann wondered whether national legalization would lead to massive consolidation or a revival of small operators. He compared cannabis to other industries that evolved over time. “When I moved back to New York 30 years ago, there were hundreds of small coffee shops until Starbucks came along and wiped them out. Now there are more single-owner coffee shops than there were before. The same thing happened with alcohol after Prohibition—large corporations took over, then decades later, we saw the rise of microbreweries and craft distilleries. So we don’t really know how this plays out.”

When asked if legalization was truly “locked in,” Nadelmann cautioned against complacency. “We don’t have to worry about rollback, right? I don’t know,” he said. “Support for legalization peaked two years ago. A couple of polls show Republican support dropping 10 to 14 points just in the last year and a half. Some organizations are already trying to reverse ballot initiatives in states like Massachusetts. If they succeed, that affects the national picture. What happens in New York or Massachusetts matters everywhere.”

He warned that despite the industry’s success, public perception remains fragile. “We know cannabis is a psychoactive substance. We all know people who use it too much or who shouldn’t be using it. We don’t want kids waking and baking. We got lucky that teenage use stayed constant after legalization, but if those numbers start to rise, never underestimate the ability of this country to do something really stupid when it comes to drugs.”

Drawing on history, he reminded the audience that the United States was the only nation to impose a constitutional amendment banning alcohol. “That’s how stupid we were,” he said. “This country can do stupid stuff over and over again, and it’s therefore incumbent upon people in this industry to be smart about how we proceed.”

Still, he offered reasons for optimism, citing growing evidence that cannabis may substitute for opioids in pain management and that cannabis beverages appear to be replacing alcohol for some consumers, which he called a net public health benefit.

 

But he urged balance and responsibility. “We know more people are using cannabis daily. For many, that’s fine, but for some, it’s not. You talk to psychiatrists, and they’ll tell you they’re seeing more young people with cannabis use disorder. You can’t ignore that,” he said.

 

As he closed, Nadelmann widened his focus to the broader “psychedelic renaissance,” calling it one of the most exciting social and scientific movements of the past few decades. He drew parallels between today’s psychedelic reform efforts and the early days of marijuana legalization, with states like Colorado and Oregon already leading through therapeutic programs. He predicted a multi-billion-dollar medicinal psychedelics industry on the horizon. He suggested that pharmaceutical companies—once obstacles to cannabis reform—could now play a positive role in legitimizing plant-based medicines.

 

“They may, in fact, be playing a helpful role,” he said, “because as they figure out which components of the cannabis plant are truly medicinal, they’ll help to legitimize cannabis as something positive.”

 

He then challenged the audience to think even bigger: “Are we going to become a society that allows people to use the substances they want to alter their state of consciousness without being punished, and regulate it in a smart way? Or are we going to find ourselves rolling back suddenly?”

Nadelmann likened the cannabis movement to the fight for marriage equality—two social revolutions that seemed impossible a generation ago but are now broadly accepted.

“These things were inconceivable 40 years ago, and they now seem locked in,” he said. “But they’re not totally locked in. We have to pay attention.”

 

An MSO’s Perspective on the New York Market

By Pam Chmiel
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At the recent Business of Cannabis event in New York, Robert Sciarrone, Chief Revenue Officer at Curaleaf, shared an MSO’s insider view on why he believes New York is poised to become the best cannabis market on the planet.

Sciarrone began by reflecting on his early years as a cannabis-focused venture capitalist. Through his firm, Measure 8 Partners, he has deployed more than $550 million across 20-plus cannabis companies globally, including dispensaries, delivery services, and technology platforms, with investments spanning California, Arizona, Nevada, Canada, and Europe.

After joining Curaleaf two and a half years ago, recruited by Executive Chairman Boris Jordan, Sciarrone transitioned from investor to operator, now overseeing revenue across 18 states in both retail and wholesale. He admitted the operational grind has given him a new respect for the business side of cannabis, but emphasized that passion for the plant and its customers remains the heart of the industry.

Looking back on the “freewheeling” investment era of 2019, when $100 million deals were being done daily, Sciarrone contrasted that speculative period with today’s market. “California’s day is over,” he declared, suggesting that the West Coast market’s oversaturation and regulatory struggles have created space for New York to lead. With its cultural influence, economic strength, and growing consumer sophistication, Sciarrone believes New York can set the standard for how cannabis culture and business shape the global industry.

As a born-and-raised New Yorker, Sciarrone expressed deep pride in being part of that evolution: “It’s my passion to be here and watch this market unfold.”

 

Curaleaf’s Early Bet on New York

Sciarrone highlighted Curaleaf’s early commitment to the New York medical market. The company was among the first Registered Organizations (ROs) to invest heavily in infrastructure, opening four medical dispensaries and building a state-of-the-art cultivation facility in Ravena, just south of Albany, in 2018. “It’s one of the nicest cultivation centers I’ve seen,“ he said, noting that Curaleaf “believed in New York early.”

However, as the state prepared to transition to adult-use, Sciarrone recalled a divide that formed between corporate medical operators and new entrants under the CAURD program. “The market was divided, and it never should have been,“ he said. Fragmentation, he argued, weakened the industry’s collective voice at a time when it needed to work together to navigate taxes, regulations, and constant policy changes.

Today, Sciarrone sees signs of progress. “The market is starting to slowly come together,“ he said, adding that Curaleaf’s approach in New York is focused on wholesale partnerships with other retailers.

He also acknowledged that Curaleaf had to earn back credibility on product quality. “When I came in, Curaleaf didn’t have a lot. People probably remember that our product quality was lacking,“ he admitted. Like many MSOs in the early days, Curaleaf had relied on scale and storefronts to drive sales. But as the market matured, so did the company’s mindset. “We’ve had to think critically about our brands, about what we’re putting in the jar—the genetics, the nose, the story,“ Sciarrone said.

 

“We’ve had a complete 180 in Curaleaf’s journey, and it started with our efforts in New York.”

 

As operators unite around shared goals of keeping stores open, expanding access, and stabilizing supply, Sciarrone said New York’s cannabis industry is beginning to find its footing. He believes collaboration between the different groups has made it one of the fastest-growing and healthiest markets in the country.

 

“If we stay the path,” he concluded, “New York will be the biggest cannabis economy in the United States.”

 

The Potential of New York Brands

Sciarrone also shared his perspective on the potential of New York cannabis brands. He noted that while West Coast brands were once expected to dominate, consumer preferences differ by region. New Yorkers are proud of their local products, and homegrown brands have a strong story that resonates with consumers, budtenders, and store owners.

 

“California brands have cachet, but we have our own stories to tell in New York,“ he said.

 

While the consistency and quality of California brands give them an advantage in some markets, Sciarrone believes that as New York cultivators and operators collaborate, local brands will thrive. He highlighted that formulated products, such as edibles and beverages, may be one area where California brands see success, but in flower, New York brands have the edge.

 

“The more that cultivators open up their doors for brand partnerships, the more opportunity there is for some really great brands to merge, and we will see true New York brands make a run at it,“ he said.

 

Track and Trace, the Illicit Market, and the Path Forward

Sciarrone also addressed the upcoming New York track-and-trace system, expected to be implemented in early 2026. He sees it as a crucial step for a fair and regulated market. “Anybody operating in New York or any regulated market should be operating with a license,“ he said. Without track and trace, unlicensed operators have easy access to the market, avoiding taxes and regulations, which undermines legitimate businesses.

The system, he explained, will provide relief to licensed operators, including microbusinesses, microprocessors, and outdoor farms, by helping them move products more efficiently and transparently. It will also give consumers confidence in the origin and safety of the cannabis they purchase. While he acknowledges that some will try to work around the system, he emphasized that track and trace is a necessary step toward maintaining a healthy, fair, and thriving market.

 

“Listen, it’s a step in the right direction,“ he said. “It will help us keep a really great economy going and prevent giving people a free swing in the market.”

 

Price Compression and Market Equilibrium

On the topic of pricing, Sciarrone noted that predicting supply and demand in New York is challenging. The market is growing rapidly, but price compression is a reality in a sector where cannabis prices are not regulated. “Price is going to come down,“ he said, and any market that expects stable high prices has never existed because supply, investment, and competition constantly influence it.

He emphasized the importance of building confidence among local operators. Micro and outdoor farms in New York are producing good-quality products. As the local supply base stabilizes without too much out-of-state competition, operators may feel more comfortable investing in cultivation and expanding capacity. “We’re hopeful that people will see it as investable,“ he said. Curaleaf itself continues to invest carefully, weighing expansion decisions against market uncertainty. Stabilization of supply, he believes, will ultimately support a healthier, long-term market.

The Hemp Equation

Sciarrone also addressed the emerging hemp space, where Curaleaf has begun experimenting with beverages and a small retail presence in Florida. While he does not oversee the hemp business directly, he emphasized its significance and complexity. The hemp market has reached $30 billion in value, growing faster than the regulated cannabis channel. It is widely available in convenience stores and major retailers, which means it is attracting new consumers who might otherwise enter the regulated market.

 

“The hemp channel is stealing our new customers,“ Sciarrone said.

 

Many consumers who are trying cannabis for the first time are turning to hemp beverages and edibles instead of licensed dispensaries. Large investments and strong lobbying by farmers have accelerated this growth, creating a reality that cannot simply be legislated away.

Sciarrone believes that the regulated and hemp industries will eventually converge, whether through national or state-level licensing. Curaleaf’s strategy is to understand the hemp market while protecting the regulated channel, where its distribution assets and customer relationships reside. “We will fight to make sure we protect the regulated channel,“ he said, noting that brand work and product development, particularly in beverages, are ongoing priorities to maintain market share.

The State Of New York’s Cannabis Industry 2025

By Pam Chmiel
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Jason Ambrosino, a disabled Army veteran and founder of Veterans Holdings, entered the New York market in 2019 under the state’s hemp program with the goal of cultivating and manufacturing cannabis. But despite holding a 5,000-square-foot indoor cultivation license, he decided not to build out his facility. The reason, he says, is simple: “The registered organizations (ROs) in New York State own the flower industry. They own it. You’re not going to break in.”

Ambrosino explained that the state’s vertically integrated ROs, many of which started as medical operators, dominate the adult-use flower market with massive 100,000-square-foot indoor canopies and the ability to negotiate favorable energy rates. “The number one driver of indoor flower price anywhere is electricity cost,” he said. “Where I am in New York State, it’s 23 cents a kilowatt hour. The ROs can negotiate directly for 7, 8, or 9 cents per kilowatt-hour because of their size. There will never be a day when I can operate in the market alongside them, because it costs me twice as much to grow as it does them.” He said that disparity makes small-scale cultivation unviable for most new entrants.

Ambrosino estimates that it could cost him roughly $600 per pound to grow cannabis, while the ROs can do it for about half that. “You don’t really think about it until you end up paying for a license, only to find out the utility prices are so high that you can’t make it work,” he said.

He believes the state’s adult-use rollout created an illusion of opportunity for small hemp farmers and microbusinesses. “They used the illusion of inclusion to gain public support,” he said. “They built protections that were meant to keep ROs out for three years to create a level playing field, but these protections were stripped away after enough lobbying dollars were spent.”

According to Ambrosino, large operators pressured lawmakers by withholding financial commitments to social equity programs until they received favorable terms. “They held them hostage,” he said. “They told lawmakers, ‘We’re not going to pay you any of that money until you give us a more favorable law.’ So, they changed it.”

The result, he says, is a market where ROs hold most of the canopy, while smaller cultivators face high costs, limited access, and few realistic paths to profitability. “Right now, microbusinesses are structured for failure,” Ambrosino said. “They’re trying to sell flower at $60 when dispensaries can get indoor-grown product from ROs for $30 or $35. You can’t compete with that.”

Mismatched Policy, Manipulated Data, and a Market Set to Run Dry

Ambrosino says the Office of Cannabis Management (OCM) has failed to recognize the growing imbalance between large registered organizations and small cultivators. “The data OCM puts out is very manipulated and questionable,” he said. “They conflict with what they report from one day to the next. One day, there’s not enough canopy, the next day, there’s too much. It’s all over the place. They’ll show you all the potential canopy of adult-use license holders, but the reality is 80% of them aren’t growing, or they’re only using part of their allotted space. Meanwhile, the ROs are operating at a massive scale.”

He believes this disconnect has led policymakers to think there’s an oversupply problem when in reality there’s a shortage of affordable biomass. “OCM looks at flower canopy, not biomass canopy,” Ambrosino said. “We don’t have enough biomass to produce distillate, and distillate is what sets the price for everything.”

Ambrosino, who sits on the board of the Association of New York Cannabis Processors, says the solution starts with expanding outdoor cultivation. “We’ve been lobbying the state to raise the outdoor cap from one acre to five,” he explained. “They keep saying there’s enough canopy, but that’s not true if you want a functioning processing and manufacturing sector.”

He also believes OCM steered small farmers in the wrong direction. “They convinced these guys to grow indoors when they had no capital to begin with,” he said. “Outdoor grows are cheaper, more sustainable, and can produce terpene-rich material that’s perfect for extraction. Giving up those outdoor licenses was the worst thing they could have done.”

Ambrosino sees the industry’s structural problems fueling a deeper issue: product inversion. “Inversion is like a cancer tumor,” he said. “Everyone — dispensaries, processors, cultivators — is supporting it. If OCM just cuts it out overnight, the market will bleed to death. We have to shrink the tumor first. The only way to do that is to expand cultivation enough that it doesn’t make sense to invert.”

Licensing Gridlock and Market Whiplash

Dispensary operators say New York’s market isn’t just constrained by bureaucracy, it’s tangled in its own rules. Jon Paul Pezzo, owner of NYC Bud dispensary, believes the state’s proximity restrictions have unintentionally frozen the licensing process. “You have a lot of people that are holding proximities because they’re in the December queue or they just have a proximity,” he explained. “Some may have abandoned their license or run out of money, but those spots are still locked up. That means someone with an actual license can’t move forward.” Pezzo said that while rolling out the market slowly may have helped at first, the process has caused problems on all sides.

Now that the agency is considering waiving its 1,000-foot proximity rule to allow more dispensaries to open, Pezzo worries it’s too soon for such sweeping changes. “The industry isn’t even five years old,” he said. “Let it play out before you start rewriting the rules. If we had known these laws would change this quickly, maybe we would have invested differently.”

He added that while OCM claims to solicit feedback from operators, the process feels one-sided. “I’ve been to many OCM meetings where everyone’s frustrated, and the regulators just sit there getting yelled at,” he said. “At some point, they just shut down. I don’t think they’re really listening to logic.”

The Data Gap: METRC, Testing, and a Lack of Standards

Ambrosino believes New York’s lack of standardized testing and tracking has left the industry vulnerable to chaos. “If you want a juicy nugget, I’ll tell you where to look,” he said. “It’s in the testing, and it’s in the labs. If you dig deep enough, you’ll find that all of our labs are invalid because they were supposed to be updated by Wadsworth Labs, the state police lab that never got the equipment. Because of that, every lab is operating under its own standard. There’s no standardization between labs, and nobody knows.”

That lack of consistency, he warns, could have far-reaching financial consequences. When potency-based taxes were imposed, each lab’s different results meant the state effectively collected taxes on unverified data. “Don’t be surprised if people start demanding money back for what they overpaid in potency taxes,” Ambrosino said.

A long-promised track-and-trace system could have helped prevent some of this disarray, but the rollout has been repeatedly delayed. After three years, the agency now says METRC will finally be implemented in January.

Jon Paul Pezzo says the delay has left retailers struggling with manual systems that are prone to human error. “In a perfect world, this should work like a supermarket—product comes in, product goes out, and it’s all scanned into one universal system,” he explained. “Instead, we’re manually entering everything, and that leads to mislabeled products and bad data. For something that’s a controlled substance, that’s unacceptable.”

He believes a fully integrated METRC system could finally bring order to the process. “You’d have cultivators logging shipments, dispensaries scanning them in, and all the details automatically syncing,” Pezzo said. “It would make everyone’s life easier and protect the business as a whole. I just don’t understand why it’s taken this long.”

The Hemp Loophole is Undermining New York’s Legal Market

“The entire industry is using the hemp loophole,” Ambrosino said, describing a troubling double standard: OCM forced him to remove hemp-derived products from his website even though the regulations permitted out-of-state sales for products under the .3% threshold, while companies like Sluggers continue to sell high-potency “THCA hemp” products directly to New Yorkers online.

“This stuff they’re calling hemp, it’s not hemp, it’s marijuana,” he said. “We have to be smarter. It’s deceptive, and it’s hurting the legal operators who are trying to play by the rules.”

Ambrosino says that without proper lab oversight and product tracking, hemp-derived cannabinoids like THCA are slipping through regulatory cracks, further undermining the licensed market.

Platform Launches Promising Insurance Coverage for Medical Cannabis—For Real

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A Cleveland-based health-tech company, EM2P2, has launched a platform that could change how Americans pay for medical cannabis. Its new product, CannaLnx, claims to make cannabis care reimbursable, compliant, and accessible by finally allowing patients to apply health-benefit dollars toward cannabis purchases in legal states.

Developed as the exclusive tech partner of the American Council of Cannabis Medicine (ACCM), a “member-first health network,” CannaLnx serves as the technology backbone of ACCM’s Elevated States initiative, which is rolling out this month through licensed insurance brokers ahead of open enrollment. The program enables patients to receive monthly reimbursements, typically $100 to $175, for medical cannabis and related doctor visits.

 

How It Works

Unlike previous attempts to blend cannabis and healthcare, CannaLnx doesn’t sell insurance or create new plans. It’s a technology layer that connects existing health insurance plans and wellness benefits programs via a secure, HIPAA-compliant platform.

The legal and operational foundation runs through third-party administrators (TPAs)—companies already licensed to manage wellness benefits under traditional insurance. These TPAs bundle standard health insurance from major carriers with supplemental wellness benefits. Inside that package sits a monthly stipend, which can be applied to qualified therapeutic expenses, including medical cannabis, in states where such purchases are legal.

When a patient submits a reimbursement claim through CannaLnx, the platform validates the patient’s eligibility, purchase, and physician authorization under state law, then securely routes the claim to the TPA for reimbursement. The TPA—not the insurance carrier—funds and administers the stipend, keeping the process compliant and shielded from federal exposure.

 

“It’s private, state-compliant, and auditable,” says EM2P2 CEO Gennaro Luce. “No taxpayer money. No federal entanglements. No creative accounting.”

 

Bridging Cannabis and Healthcare

This model allows individuals, families, gig workers, and even Fortune 500 companies to offer medical-cannabis benefits as part of broader wellness packages. It’s available across all 39 states where legal medical cannabis programs can integrate into ERISA and health-sharing plans.

In other words, CannaLnx isn’t a workaround—it’s a structurally legal bridge. “We don’t bend or avoid rules; we work within the rules that exist,” says Luce. “CannaLnx’s role is to ensure those rules are followed.”

By integrating with electronic medical records and dispensary point-of-sale systems, the platform makes reimbursement traceable and compliant, giving dispensaries verified patient transactions and offering employers and brokers a way to meet growing demand without taking on federal risk.

 

Early Adoption and Industry Impact

Early partners include TPAs such as Detego Health, 90 Degrees, and Iron Health, as well as broker groups like United Agencies, which are already onboarding employers for the program.

“This is the first time brokers can offer transparent, compliant health-benefit programs that include medical cannabis,” says John Miller, program director at United Agencies. “It brings structure and accountability to an industry that has long needed it.”

The ACCM, which has long advocated for national medical-cannabis integration, says the collaboration represents a turning point. “This is the digital backbone behind a new chapter in medical cannabis,” says Scott Rancie, ACCM spokesperson. “It’s how we finally connect patients, providers, and dispensaries to legitimate, regulated health-benefit programs.”

 

A Step Toward Normalization

The CannaLnx platform may not represent the final form of cannabis coverage, but it could mark the beginning of mainstream adoption. By fitting cannabis into the same benefit frameworks that already cover acupuncture, fitness stipends, or smoking-cessation programs, CannaLnx positions itself as the first fully compliant bridge between healthcare and cannabis.

“We’re proving reimbursement can be done transparently, lawfully, and at scale,” says Luce.

Elevated States Programs can be explored here.

Read the press release.