Tag Archives: Focus Article

How To Use Blunts As a Brand Building Catalyst

By Harrison Bard
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There’s an opportunity in the pre-roll sector that many companies are missing.

The pre-roll sector is the fastest-growing category in the cannabis industry. In 2025 alone, $3.6 billion worth of pre-rolls were sold across the 14 markets tracked by cannabis analytics firm Headset.

Customers love the portability, the ease of use, and the innovation modern pre-roll producers are bringing to shelves, not to mention a price point that gives them a chance to try new strains and brands. On top of that, New Frontier Data found that the joint is still the top preference for consumption.

But even with millions of products and thousands of brands competing for those dollars, an opportunity lurks. For example, while joints may be the top way people consume, the blunt sits firmly in third place, with 33% of smokers listing it as their favorite way to consume.

Meanwhile, the pre-rolled blunt segment remains one of the smaller parts of the pre-roll industry, accounting for just 4.1% of pre-roll revenue.

And that is an opportunity.

 

Pre-Rolled Blunts by the Numbers

Looking at the segment sales numbers for the pre-roll category, it’s easy to overlook the cannagar/blunt segment. After all, it appears to be the second-smallest segment on the entire pre-roll industry, bringing in just $16.3 million on the sale of 1.3 million units.

But those numbers do not tell the full story.

What we found is that Headset, which tracks point-of-sale data, places infused blunts in the “infused” category rather than the “blunts” category, significantly deflating the “blunt” numbers.

Looking more deeply into the data reveals that products containing the word “blunt” in their name account for $148 million and 8.5 million units sold, up from 8.4 million units the year before.

That’s a lot of people buying pre-rolled blunts.

 

Evolution of the Pre-Rolled Blunt Wrap

Unlike joints, which made a seamless transition from hand-rolled delight to full-on consumer packaged good thanks to the pre-rolled cone, the blunt’s journey was a little bumpier.

That’s because, unlike pre-rolled cones, which are made from the same rolling paper that you can buy in a pack and roll with at home, the blunt is traditionally rolled with a tobacco leaf. And every single state with a legal market prohibits the sale of tobacco and cannabis together.

That simple rule led to the development of a whole host of non-tobacco blunt wrap alternatives, all designed to recreate the slow-burning, full-bodied smoking experience of a classic blunt.

The most common non-tobacco blunt wrap used in pre-rolled blunts is hemp wrap. Made in a similar fashion to the tobacco wraps used in the cigarillos commonly used to roll blunts, hemp wraps create a similar appearance and burn without the nicotine. Plus, because they are made of hemp, the subtle, earthy flavor they impart never gets in the way of the flower, only enhancing it.

But while the hemp wrap is great for pre-rolled blunt cones and blunt tubes, there are some clear nuances to the product. For example, because of the way it is made, the hemp wrap relies on the bonds between water molecules to hold it together. That’s why when it starts to dry out, those bonds break, and the wrap begins to crumble and fall apart.

To address that problem, Custom Cones USA developed the hybrid hemp wrap, which uses a different process and mixture to blend the strength of hemp paper with the slow-burning properties of hemp wrap. By relying less on the water bonds, hybrid hemp wraps stay fresh and pliable longer than standard hemp wraps.

Aside from hemp, tea leaves are another popular alternative for making pre-rolled blunt cones. To make them, tea leaves are often combined with other botanical ingredients, creating a wrap that has a slightly sweet flavor that burns slowly.

Another popular alternative blunt wrap is the palm leaf, usually made from the leaves of the cordia or tendu tress. However, because they are natural products, those leaves often have undesirable levels of heavy metals absorbed from the soil, which can be dangerous since rolling paper companies are not required by law to test their products. We do, however, and finding a consistent source of palm leaves that can pass lab tests proved difficult, so we no longer offer those products.

Finally, there are a handful of other non-traditional botanical options that are turned into cones and wraps, such as lemongrass, lavender, chamomile, or goji berry, which give the cone a striking, bright orange appearance.

Though data on the wraps used in pre-roll blunts is a little harder to find, hemp wraps are the most popular on the market, with tea wraps in second. We see this as a marketing opportunity, with brands able to highlight what their wraps bring to the experience.

 

Filter Tips

Modern pre-rolled blunts also offer a variety of filter tip options, unlike their hand-rolled cousins, ranging from paper filters similar to those in pre-rolled cones all the way up to premium options like glass and ceramic, which not only block particles but also help cool the smoke for smoother, more flavorful hits.

Paper filter choices include the classic “w” filter in blunt cones. Paper spiral filters, perfect for pre-rolled blunt tubes, up the ante, providing a larger surface area with which to catch particles and resin while keeping the feel of the wrap.

Wood tips provide a nice upgrade while maintaining a natural feel on the lips and are available in both standard and flavored options. And because the flavoring is infused in the tip, the taste stays on the lips and never gets in the way of your flower.

For a higher-end option, there is glass, which not only blocks particles but also cools the smoke. Finally, ceramic filter tips provide a luxury option, using the natural cooling power of ceramic to deliver the biggest, smoothest hits available.

For smokers who want a smooth, cooling filter tip, but a natural feel, embedded bullet glass tips – whether in hemp wraps or tea leaf wraps – deliver a high-quality smoke every time.

There are even dual filter options, which combine the stopping power of paper with the smooth feel and cooling effect of glass; a truly premium experience.

 

Infuse Your Blunts

Perhaps the most important note when developing your pre-rolled blunt line is to remember that it’s infused blunts that dominate. Infused blunts are a $130.7 million market, accounting for a whopping 85% of blunt units sold and 88% of pre-roll blunt revenues.

In fact, all 25 of the top 25 selling pre-rolled blunt products – and 49 of the top 50 – are infused products (the lone non-infused product is a 3-pack at no. 48). Looking even deeper, the majority of the products sold – about 82.3% of infused blunt sales – use multiple infusion techniques instead of a single method.

Among single infusion methods, diamond-infused blunts capture the highest share of the market at 11.3% of infused blunt sales, or about $19 million, followed by distillate at 4.5% ($7.5 million).

 

Branding Your Blunts

We hear from customers that while potency and price are the top two factors when making a pre-roll purchase, brand is a close third. That’s why it’s so important to customize your pre-rolled blunts; there is no way for someone in the circle to know whose product they are enjoying.

Because blunt wraps are more opaque than rolling papers, the primary ways of branding pre-rolled blunt products is with custom cigar bands and custom filter wraps. Both can be designed with custom dielines, spot UV, and premium foil to ensure your message and branding get through.

 

Final Thoughts on Pre-Rolled Blunt Market

With blunts ranking third among consumption methods, we see tremendous opportunities in the pre-rolled blunt market for companies looking to scale or expand their pre-roll lines.

Pre-rolled blunts generated more than $148 million in 2025, indicating a large fanbase looking for these products. Meanwhile, just 14.4% of all pre-roll brands offer a blunt product (455 of 3,156 brands), with the top three brands (STIIIZY, Presidential, and BoxHot) accounting for a massive 49% market share.

And that is pure opportunity for the right brand with the right products and branding to swoop in and dominate the dispensary.

Just remember to infuse your blunts.

 

 

The Cannabis Retailer’s Survival Guide to 2026

By Pam Chmiel
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2025 saw most businesses scrutinizing their operations to trim margins and survive the tumultuous market. 2026 is about digging deeper to uncover hidden costs that will further improve their bottom line.  

Tom Zuber, partner at Zuber Lawler, led a panel discussion at the recent IgniteNJ event, where experts offered advice on margin discipline and where to cut costs.

 

What to Consider When Entering A New Market

Trent Woloveck, Chief Strategy Officer at Jushi Holdings, says retailers entering a new market must evaluate three core cost centers: labor, compliance, and real estate.

Operators should closely analyze traffic patterns, peak hours, and staffing models to understand true operating costs and potential revenue. Retail, he notes, is a people-centric business where customer experience cannot be sacrificed, even in a margin-compressed environment.

Engaging with local authorities and community leaders is essential for educating lawmakers and shaping favorable, reasonable legislation. Woloveck emphasizes the importance of being a responsible operator so that regulators do not feel as though the sky is falling simply because they legalized medical and/or adult-use cannabis.

When it comes to real estate, Woloveck stresses the importance of a “main on main” location with high traffic counts, adequate parking, and strong signage, while keeping rent between 3% and 5% of total projected revenue as a benchmark for profitability. He acknowledges that securing prime locations remains one of the harder costs to control, largely because many landlords near malls or carrying mortgages on their properties are still unwilling to lease to cannabis operators. Woloveck is optimistic that federal rescheduling will expand that pool of willing landlords, increasing supply and putting downward pressure on rents. He draws a parallel to COVID-era lease concessions that proved beneficial for operators in markets like Virginia.

 

Battling Price Compression

While retailers are combating price compression that is driving down basket size, Travis Scadron, EVP at Surfside, suggests other ways to increase margins by passing merchandising costs onto brands and monetizing the real estate on your website. He cites Amazon as an example, noting that 68% of the profit on Amazon’s e-commerce platform comes from advertising sales. He stressed the importance of pushing the right products at the right time and with the right pricing.

Trip McDermott, COO of Verano, a vertically integrated operator, says the company is seeing margin erosion across all areas of the supply chain. He specifically pointed to cultivation, noting that labor prices are rising, as are input costs such as salts, nutrients, and coco. On the retail side, he said labor costs are also increasing, compounded by mounting pressure to discount.

“So, there’s erosion happening everywhere, but it’s where you can control part of that erosion, which is going to be around reducing turnover of your employees, trying to get more out of them, continuous training so you’re not having to rehire, improving efficiencies so that you’re getting more units per head out of all those employees,” he advised. “Automate where you can without sacrificing quality, and really look into the data to understand where there’s opportunity for improvement,” he added.

McDermott highlighted extraction processes as an area where costs are easily overlooked. Operators who are not capturing data on their extraction yields may be quietly eroding their margins without realizing it. Key questions to ask include: What are your inputs? Is it trim or flower? What are the yields on the other end of the extraction process? “I would say that’s an area for improvement, a lot of operators should really focus on,” said McDermott. “Capturing that data is not only important for fully understanding your cost of goods, but it also adds up to a lot of money at the end of the day.”

 

Customers First

Krista Raymer, Chief Strategy Officer at C3 Industries, cautions operators against cutting costs in areas that directly impact the customer experience. In a market where a core group of loyal customers drives the bulk of transactions, she argues that retaining existing customers is just as important as acquiring new ones. Labor reductions, shifts in inventory assortment, and changes to the marketing mix can all have unintended consequences for the in-store experience if not carefully considered in advance.

 

The Hidden Risks of Inventory

On the inventory side, Raymer warns that carrying costs can quietly balloon as operators chase newness and freshness to satisfy customer demand, which does not always align with how quickly the product actually moves. Maintaining analytical control over inventory is critical to avoiding dollars tied up in slow-moving product. Tom Zuber echoed the point, noting that buyers need to stock what actually sells and not be influenced by vendor friendships. If a brand does not meet customer expectations, it will sit on the shelf as dead weight, becoming a direct drag on the store’s bottom line.

Verano’s McDermott adds another dimension to the inventory conversation, pointing to product costing at the facility level as one of the most under-invested areas in the industry. He argues that implementing an ERP system to accurately understand the true cost of producing each product is foundational to becoming a fully dialed-in operator. The process is not easy, but McDermott says it will identify weaknesses and pinpoint where products are underperforming, providing direction for SKU rationalization. Without that level of product cost of goods, he warns, operators are likely working from their gut, which is further off than they realize.

 

Flexibility and Market Pivots are Key

Woloveck notes that rather than spreading thin across many markets, Jushi has shifted its strategy toward going wider and deeper in select states, pulling back on store expansion after a 40% increase in store count and redirecting dollars toward cultivation buildouts in high-opportunity markets like Virginia and Pennsylvania. He noted that this “concentrate and win” approach has become a common strategy across both public and private MSOs.

On vertical integration, the panelists offered contrasting views. Verano’s McDermott says that being vertically integrated in New Jersey has been an advantage, allowing the company to capture margins at every stage and bring new products to market where it can be more price-competitive in the wholesale space, particularly as newer brands use price as a competitive weapon.

Raymer says the company assesses each operation state by state and that vertical integration is not a one-size-fits-all strategy. In New Jersey, C3 operates without vertical integration, and Raymer says that works because it allows them to experiment with the market without operational pressure. In Missouri, by contrast, the company is fully vertical, targeting a set percentage of its own product through retail. As wholesale costs evolve and markets mature, she suggests the evaluation around vertical integration will continue to shift. “It just depends on where the state is, both from a cost to produce, as well as what the wholesale costs look like within that market,” she said.

 

Looking at Product Margins From Different Angles

Raymer says C3 Industries looks at inventory and assortments within a state and then by store to identify where there is room to push on margin or negotiate costs based on factors like sales velocity. The company uses markup strategies based on how quickly a product moves through the environment, focusing on total margin dollars rather than margin as a percentage.

Woloveck has observed a notable consumer shift toward larger units, with customers trading up from eighths to quarters or ounces on flower, and vape formats growing from 0.3 grams to 2 grams. Larger pack sizes lower the cost per unit and improve overall margin dollars, even if total unit count decreases. He stressed that every state, and even a city or jurisdiction within a state, requires its own distinct strategy.

 

 

 

 

NIH Releases Scientific Paper on the Therapeutic Value of Acidic Cannabinoids

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A new scientific review published in the National Library of Medicine (NIH) shines a spotlight on one of the most overlooked areas of cannabis science: the untapped benefits of acidic cannabinoids naturally produced by Cannabis sativa — THCA, CBDA, CBGA, and CBCA.

These compounds are the biosynthetic precursors to THC, CBD, CBG, and CBC. But the review makes a critical point: acidic cannabinoids are not simply “pre-THC” or “pre-CBD.” In their native form, they are non-intoxicating, pharmacologically distinct, and biologically active in their own right.

All major acidic cannabinoids originate from CBGA, often referred to as the “mother cannabinoid,” which is enzymatically converted into THCA, CBDA, or CBCA in the plant’s glandular trichomes. However, the challenge in accessing these powerful compounds lies in their chemical instability. Exposure to heat, light, oxygen, or time triggers decarboxylation — the loss of CO₂ — converting THCA into THC, CBDA into CBD, and CBGA into CBG.

Standard drying, curing, extraction, distillation, baking, and even storage conditions unintentionally reduce acidic cannabinoid content. Thermal extraction methods commonly used in manufacturing can effectively eliminate the very compounds this review highlights as therapeutically promising. Preserving acidic cannabinoids requires cold processing, stability-aware packaging, careful solvent management, and analytical methods that avoid artificial decarboxylation during testing.

From a pharmacological perspective, acidic cannabinoids exhibit multi-target activity that differs meaningfully from that of their neutral counterparts. Rather than strongly binding to CB1 receptors, THCA shows minimal CB1 affinity, meaning it does not produce intoxication. Instead, acidic cannabinoids act on molecular targets including 5-HT1A serotonin receptors, COX-2 enzymes, PPARγ nuclear receptors, TRP ion channels, calcium signaling pathways, and Alzheimer’s-related enzymes such as BACE-1 and cholinesterases.

Preclinical findings suggest broad therapeutic potential. In neurodegenerative disease models, acidic cannabinoids reduced amyloid-β accumulation, modulated intracellular calcium, decreased neuroinflammation, and improved memory performance. Their multi-target activity may be particularly relevant in Alzheimer’s research, where polypharmacology is increasingly valued.

In inflammation and pain models, THCA and CBDA demonstrated COX-2 inhibition and PPARγ-mediated anti-inflammatory effects, reducing joint swelling and cartilage damage in arthritis studies. Early oncology research shows anti-migratory and anti-proliferative effects in aggressive cancer cell lines, along with anti-metastatic signaling pathways. In epilepsy models, CBDA increased seizure thresholds, particularly when optimized formulations enhanced central nervous system exposure.

The paper emphasizes a major barrier in their pharmacokinetics. Acidic cannabinoids exhibit rapid absorption but short half-lives, low brain penetration, and limited bioavailability due to their carboxyl group, which restricts blood–brain barrier permeability. Delivery systems significantly influence outcomes, suggesting formulation science may be as critical as molecular discovery.

Regulatory hurdles remain substantial. No acidic cannabinoid has received FDA approval, and clinical trials in humans are limited. While some products are marketed under supplement frameworks, potency variability and labeling inconsistencies persist.

The authors conclude that acidic cannabinoids represent a biologically compelling but technically fragile class of compounds. Their instability, limited pharmacokinetic data, and lack of controlled human trials have slowed medical adoption. However, advances in stabilization, encapsulation, delivery systems, and microbial biosynthesis could unlock their potential as next-generation precision cannabinoid therapeutics.

You can read the full study here:

What Cultivators Are Talking About in New Jersey

By Pam Chmiel
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New Jersey is a highly desirable cannabis market for new operators because of its rapid billion‑dollar growth, strong consumer demand, and status as one of the most profitable yet undersupplied markets on the East Coast.

Cultivators came together at the recent IgniteIt event to share their perspectives on the market. Genetic preservation, price compression, the future of breeding, and what makes a great cultivator were among the key topics.

 

What Makes A Good Cultivator?

Aside from operational chops, a cultivator must be able to “read the room” in their cultivation facility. Panelist Chad Salute, Head of Cultivation at iAnthus, who has been growing since the 90s, says, “It’s not just a set-and-forget-it environment, light or irrigation strategy.” He added that great cultivators are the ones who can come in, read the plants, and push them as hard as they can to get the most expression.

Salute explained that top growers rely on constant observation and hands-on adjustments. They monitor subtle cues like plant color, structure, and canopy variation, then fine-tune conditions daily. He compared the process to training athletes, noting that strong vegetative growth lays the foundation for peak performance later in the cycle. Ultimately, he said, the difference comes down to experience and instinct. The best cultivators can scan thousands of plants, spot small micro-environmental issues, and make targeted changes that bring out the highest quality results.

Josh Krane, Fractional Head of Innovation for Justice Cannabis, adds, “If someone doesn’t have those ‘goggles,’ the best SOPs, the best building, the best nutrients are not going to get you to the best expression of that plant.” He added, “On a per-cultivar basis, I need a few turns with the plant to really understand how it responded to the tweaks we made, and if we are getting the best out of this plant, and if it is going to stay in our cultivation long-term.”

Tanner Travers, founder of Pantheon Cultivation, described growing as “half science, half art.” He emphasized that growers must deploy data in their grow rooms, but also know that every strain and facility behaves differently, making trial and error part of the process. Krane added that cultivators rarely have the luxury of running single-strain rooms. Instead, they must use experience and judgment to set environmental conditions that support multiple genetics at once, constantly fine-tuning to keep diverse plants performing well.

David Todd, VP of Enterprise Solutions at GrowGeneration, pointed out that growers historically relied on heavy, often imbalanced nutrient inputs without fully understanding why certain techniques produced standout results. He said today’s advances in plant science and data are helping cultivators move beyond trial and error toward more precise nutrient strategies.

Salute added that some of the “fire” expression from legacy grows may have come from plant stress, which researchers are now studying in more depth. He said identifying controlled stress triggers that enhance terpene and cannabinoid expression without harming plant health is the focus for cultivation science.

 

Price Compression as an Opportunity

Krane advises operators to seize the moment before the race to the bottom forces growers to prioritize yield over craft product. “Now is the time to discover what your market wants, what works best for your strategy, your growth philosophy, and then dial that in,” he said. “Ultimately, we’re all going to hit our canopy cap. Then it’s going to be a race to see who can stay economically viable. So, a great lead now helps future-proof revenues tomorrow.”

There may be a silver lining to operating in state silos: it forces operators to get granular about consumer preferences to build their brands and inform product lines, rather than casting a wide net across state markets. This approach is creating a unique view of the different cannabis cultures across the U.S. that other industries don’t have.

Krane, who has led grows in other states, says he has learned that what works in one state doesn’t work in another. “This is a unique industry with a unique customer base that wants a very specific set of characteristics in their cannabis,” he explained. For example, he finds that California loves candy, while New Jersey is a haze-driven market.

Budtenders and buyers are a great resource for understanding consumer preferences, says Krane, but he urges brands to go directly to consumers to see what resonates with them. “They are a vocal market and want to share their opinion,” he said.

David Holmes, founder of Claude9, says they have hosted a very popular event for years, inviting a couple of hundred people to sample a variety of strains and gather data on what consumers want in their cannabis.

 

2026: The Year of Breeders and Genetics

As the cannabis industry grows, the need for stabilized seeds that reliably produce uniform plants over generations is becoming essential for scaling production and meeting market demand.

According to Holmes, breeding has picked up in the last five years, with large-scale meetings among breeders becoming more frequent, as breeders try to crack the code for hybrid seeds, where 500 to 1,000 seeds in an indoor facility could be uniform and replace clones. While he still thinks the ability to create true hybrid seeds is years off, he gave investors a shout-out, saying that if they want to keep their finger on the pulse, they should look at hybrid seeds for expansion opportunities.

 

Sounding the Alarm Over Genetics

Panelists also highlighted the growing urgency around long-term genetic preservation and the need for more genetic banking services. Travers pointed to emerging solutions such as cryogenic storage and tissue culture banking, which allow cultivators to preserve meristem tissue at ultra-low temperatures and potentially restore plants years later. He warned that without these tools, valuable cultivars can be lost due to pathogens, epigenetic drift, and the practical limits of maintaining mother plants.

Salute explained that tissue-cultured preservation is not without challenges; it does not always return with the same expression growers remember, while Krane added that even successfully revived legacy strains may no longer meet modern commercial needs for yield, consistency, or consumer preferences. Panelists did agree that as technologies mature, genetic banking will play an increasingly important role in protecting cannabis biodiversity and giving operators the option to reintroduce classic cultivars in the future.

Travers also noted that beyond preservation, tissue culture offers a practical operational benefit. By storing genetics in culture rather than maintaining large mother rooms, operators can significantly reduce the footprint required for long-term plant maintenance, freeing up valuable canopy and propagation space.

 

The Future of Exports

Panelists said that while many cultivators would welcome the opportunity to export cannabis internationally, significant regulatory and market hurdles remain. Holmes noted that export markets typically require expensive GMP-level facilities and strict testing standards, which can drive up costs and, in some cases, affect product quality. Krane added that large-scale exports would likely favor industrial agriculture models focused on yield and consistency rather than craft quality. They agreed that global trade could create a clear divide between high-volume export cannabis and smaller, premium cultivation.

Todd offered a more optimistic view of global expansion, particularly from a supply and technology standpoint. He said emerging European markets are creating strong demand for American cultivation inputs, expertise, and intellectual property. Rather than exporting flower, he sees major opportunities in exporting proven cultivation solutions that help growers learn from the U.S. market to raise all boats. As new international markets develop, Todd said products backed by real-world R&D and reliable data are resonating with cultivators worldwide seeking a competitive edge.

Jersey Girls Bring Down the House At IgniteIt Event

By Pam Chmiel
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There was passion, power, and plenty of practical business advice from the women (and one man) who took the stage at the recent IgniteIt event in New Jersey. As the industry shifts away from the early “shiny-object” phase, operators are increasingly doubling down on what works. A few years ago, the prevailing growth strategy was to go wide, not deep. Today, that mindset has changed.

Miss Grass CEO Kate Miller said the company is prioritizing focus over expansion for expansion’s sake. “We are focusing on what’s working,” she explained. “More specifically, we are investing in our priority markets.” While the brand currently operates in eight states, Miller noted they no longer treat every market equally; instead, they concentrate resources on their top performers rather than spreading themselves too thin.

 

Find Your Partner and Do-si-do

Faye Coleman, CEO of Pure Genesis Dispensary, emphasized that success in cannabis rarely happens alone. “You don’t have to stand alone and fight this battle,” she said, encouraging operators to think creatively about partnerships as stepping stones to growth.

“Sometimes your retailer is your partner. Sometimes your vendor is your partner, your ancillaries are your partner, even your insurance carrier is your partner,” she explained. “All those partnerships do exist.”

Coleman also stressed the importance of flexibility. While waiting for their dispensary application to move forward, she and her team pivoted into beverages to generate revenue and maintain momentum.

Angela Brown, CEO of Coast Cannabis, agreed that partnerships are essential for survival and expansion, particularly given federal restrictions. “The idea of shipping across state lines is a dream we all have, but not a reality,” she said, noting that collaboration is often the only viable path to multi-state growth.

From a manufacturing perspective, SōRSE Technology CEO Howard Lee said he still considers New Jersey an emerging market and has seen similar cycles before. Early entrants often arrive flush with enthusiasm and capital, but many fail to survive. “You go through this first wave of very enthusiastic partners… many don’t make it,” he said. “Then you find the partners who have survived the chaff — and that’s when the relationship really starts to work.”

Roz McCarthy, CEO of Black Buddha, added that not all partnerships need to be perfectly balanced to be valuable. She compared them to a dance — one that requires testing the chemistry before committing. “Maybe it isn’t a 50-50 split in Jersey,” she said, “but the relationship can create opportunities that push your business to another level.”

During negotiations, Coleman stressed the importance of defining and enforcing non-negotiables. “How do you make certain that they understand and respect the agreement? You put clauses in for when they break it. That’s what you do,” she said.

She also underscored the importance of mindset in choosing partners: “There are three types — survival, thriving, and winning. Get with the builders and the winners. Don’t let people waste your time.”

 

The Exit Strategy Many Operators Forget

Lee also offered a cautionary tale about partnership risks, warning operators not to overlook exit terms. He shared that his company once accepted a major investment in exchange for territorial exclusivity, only to become locked into a stagnant relationship for two years when the partner failed to execute.

“We never negotiated a strong exit,” he said. “We couldn’t buy back the exclusivity or unwind the agreement, and it cost us millions in lost revenue.” His advice: always ensure contracts include clear pathways to terminate or restructure partnerships if they stall.

 

Where Outsourcing Saves Money—and Where It Doesn’t

As new operators continue to enter the market, outsourcing has become an increasingly popular strategy to reduce barriers to entry. But the panelists were quick to point out that outsourcing isn’t a one-size-fits-all solution—and without proper planning, it can quietly erode the margins operators are trying to protect.

Lee encouraged new businesses to consider outsourcing to established, large companies. “Don’t be afraid of established large businesses that have enormous resources,” he said. Co-packers and packaging companies with mature R&D and quality teams can be valuable partners, particularly for operators who aren’t yet ready to build those capabilities in-house. The key, he argued, is to use those relationships as learning opportunities, not just as cost-cutting measures.

For operators trying to gauge when it makes sense to invest in headcount versus outsourcing, Lee offered a straightforward metric: revenue per employee. “Just divide your revenue by the number of employees,” he said. “At some point, it’s going to make sense to invest in people to do that job, but you won’t know it until you have revenue per employee.” In today’s capital-constrained environment, that discipline is essential. “Ten years ago, capital was easy. You could hire a bunch of people. But now you really have to manage—can I outsource it before I get more capital?”

Coleman urged operators to tap their professional networks before selecting outsourcing partners. “We’re leaning on each other to give those recommendations, because let’s face it, we’re a small industry,” she said.

But beyond finding the right vendor, she stressed that operators must first understand their own businesses before outsourcing anything.

“What you own is your competitive advantage,” Coleman explained. “I would say the first question you need to ask is: have you done an inventory of your business to understand where you need to outsource, what you need to own, and what you need to park on.” Too often, she cautioned, operators chase a specific opportunity without adequately assessing their financial models, growth pace, or capital runway. “Have you done the right financial modeling to make certain that if you outsource, you’re going to make the margin? Or if you grow too fast, do you have the capital budget to keep pace?”

 

Where Innovation Really Comes From

“The innovation comes from all sorts of places,” Lee reflected. “The first thing is, you gotta listen to your gut—and at the same time, you gotta listen to your team.” He agreed, data matters, but so do the delivery drivers and frontline employees who hear directly from customers every day. When you have no data, follow your instincts. When people tell you what they want, listen to them.

 

AI as a Business Tool—Not a Business Strategy

Several panelists pointed to artificial intelligence as a growing force in their operations, though they were careful to distinguish between using AI as a tool and letting it drive the business.

McCarthy shared how Black Buddha recently partnered with an AI engineer to build a custom real-time dashboard that pulls market data and synthesizes it into actionable intelligence. “When you’re cash-deficient and don’t have unlimited resources, you have to make smart decisions about where you’re spending your time,” she explained. The dashboard now gives her visibility into New Jersey’s top retailers, their spending by product category, competitor pricing, and sales velocity—all in real time. “That’s going to be the dagger for me to outperform what I did last year,” she said.

Brown echoed the sentiment, noting that AI has become a company-wide initiative at Coast Cannabis heading into 2026. “If you are going to grow into multiple marketplaces and utilize partnerships, you have to understand the data for each one of those states,” she said. “It’s impossible off the top of your head to know everything in five markets, eight markets.”

Coleman offered up caution, “AI is great as a tool,” she said. “Be careful, it does not lead to the innovation of the business.” She believes that operators who let algorithms chart their course risk losing the human judgment that built their brands in the first place. She also tied AI adoption to team quality. “Does your team poke holes in your strategy consistently? If they do not, you have the wrong team. There’s nothing like having everybody say okay—that’s when you know you’re already dead.”

 

Portfolio Strategy: Margin Drivers vs. Brand Builders

Brown stressed the difference between assessing margin drivers versus your brand builders. For her company, data and customer feedback have guided product development, particularly in understanding what works for most consumers in categories such as sleep-focused edibles.

At the same time, Faye Coleman cautioned that while AI can enhance decision-making, it should never replace human leadership or strategic thinking in identifying opportunities and challenging assumptions.

Finally, Kate Miller noted that innovation increasingly involves structuring diverse product tiers — from premium, high-margin offerings to value products — while balancing working capital constraints. Panelists also highlighted flexible deal structures, such as revenue-share models, as innovative financial strategies that enable brands to scale without overextending resources.

 

When Working Capital Is the Bottleneck, Consider a Hybrid Model

McCarthy closed the discussion with a candid account of a costly lesson in working capital management. Early in Black Buddha’s brand journey, she took on contract manufacturing deals she couldn’t sustain. “I lost money, I lost credibility, I lost opportunity,” she said plainly.

An investor reviewing her financials encouraged her to consider revenue-sharing and royalty models as strategies, particularly for brands building market traction without deep capital reserves. Under this approach, the manufacturing partner absorbs the operational load while the brand focuses on driving sales velocity and expanding retail presence.

“Don’t feel like it has to be one versus the other,” McCarthy urged. “There could be a hybrid.” A brand might use revenue-share arrangements in new markets to establish traction, then layer in co-manufacturing deals in markets where they’ve already proven demand to preserve capital while building the distribution footprint needed to scale.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Meet California’s New Director of Cannabis Control

By Pam Chmiel
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California’s medical cannabis market began in 1996 when voters passed Proposition 215 (the Compassionate Use Act), making it the first state to legalize cannabis for medical use. Twenty-two years later, Proposition 64 ushered in adult-use sales, which commenced in January 2018.

Initially, three separate agencies handled different aspects of the industry:

The Bureau of Cannabis Control (BCC) oversaw retail sales, distribution, testing laboratories, and microbusinesses for both medical and adult-use cannabis. Cannabis Cultivation Licensing (part of the Department of Food and Agriculture) regulates and licenses commercial cannabis cultivation operations, including track-and-trace systems. The Manufactured Cannabis Safety Branch (part of the Department of Public Health) managed licensing and oversight of cannabis product manufacturing, such as edibles, concentrates, and topicals.

In July 2021, these three programs were consolidated into the California Department of Cannabis Control (DCC) to streamline licensing and enforcement, enhance consumer protection, eliminate redundancies, and simplify compliance for businesses.

 

A Market Teetering on the Edge

Clint Kellum, the newly appointed DCC Director, faces one of the hardest jobs in cannabis: stabilizing California’s struggling market. This is no small task in a state that serves as the genesis of cannabis culture and cultivation expertise—the very foundation on which the industry is being built.

Kellum is no newcomer to the challenge. He has served as the department’s chief operating officer for the past five years and brings more than 18 years of state government experience, including budget and policy development at California’s Department of Finance. The DCC’s responsibilities span issuing licenses for cultivation, retail, manufacturing, distribution, and laboratory services; monitoring operators to ensure compliance; and maintaining a law enforcement division focused on dismantling the illicit market.

 

Navigating the Framework of Prop 64

In a recent interview, Kellum broke down the hurdles facing the DCC, pointing out that many of the industry’s biggest pain points were baked into the original voter-approved initiative. Proposition 64 established high tax rates, dictated how revenue would be allocated, and granted 550 individual jurisdictions the right to “opt out” of the legal market.

While the industry often looks to the DCC for sweeping changes, Kellum notes that as a regulatory agency, his office does not have the authority to rewrite tax policy or override local land-use decisions. Instead, his strategy focuses on working within the existing legal framework to drive progress.

 

The Push for Local Expansion

One of Kellum’s primary objectives is addressing “cannabis deserts” across the state. Because many local governments remain hesitant to permit retail sales, the DCC is pivoting toward an educational role to bridge the gap between state legality and local reality.

“We have efforts to help educate and share information with local governments about the challenges of not having legal access in their jurisdictions,” Kellum explains.

He points to a recent Cal Poly research study demonstrating a direct correlation between the lack of retail access and the growth of the illicit market. By sharing this data, Kellum hopes to prove to local officials that “opting out” often creates the very public safety issues they were trying to avoid.

Beyond advocacy, Kellum recognizes the administrative burden placed on small municipalities. “It is complicated on their end, too,” he admits. “They may not have the resources to know how to run an RFP, a lottery, or a first-come, first-served licensing process.” To combat this, the DCC is actively absorbing and sharing best practices to help local governments navigate the complexities of retail implementation.

However, Hirsh Jain, CEO of Ananda Strategy, a business advisory firm working with many of California’s leading cannabis brands and retailers, offers a more cautionary perspective. While education has value, many California cities remain reluctant to license cannabis businesses not because of an information gap, but because of what they’ve observed in practice—widespread business failures and disappointing tax revenues.

“The hundreds of millions of dollars in cannabis tax revenue that the City of Los Angeles is owed, but will likely never collect, is frequently cited by other jurisdictions as evidence that California’s legal cannabis model is fundamentally flawed,” Jain notes, attributing the problem largely to state regulatory and tax burdens.

Education alone, he argues, will not overcome the deep skepticism many local governments have developed in the decade since Proposition 64 passed—skepticism that continues to drive their refusal to participate.

Jain suggests the state could go further by spotlighting successful local models already operating within California. “Cities such as San Francisco, which has adopted a 0% local cannabis tax rate and offers free medical cannabis ID cards, demonstrate how thoughtful local policy can support legal market participation,” he says. By elevating these proven practices, the state can provide cities with concrete, real-world examples of what works.

 

Reducing The Burden of Costs

It doesn’t take an MBA to understand that increasing taxes on already struggling operators could be the final blow for many in the California market. Director Kellum commended Governor Newsom for signing AB 564 in late 2025. The legislation effectively halted a planned 25% tax hike (which would have seen the excise tax jump from 15% to 19%) and locked the current rate until 2028

Beyond tax relief, the DCC has restructured its funding to avoid increasing operators’ costs. Previously, the department was funded almost entirely by regulatory fees paid by licensed operators during their annual licensing process. Last year, the department shifted approximately $70 million—40% of its budget—from licensing fees to the state’s cannabis tax fund.

“Which really avoided us having to do what would have otherwise been a significant licensing fee increase,” Kellum explains. “So, in some ways, I can understand if you’re an operator, you didn’t see that because you didn’t feel the actual increase, but it is a cost avoidance because we’re trying to be mindful of those.”

While the change may not be immediately visible to operators who didn’t experience a fee hike, it represents a significant effort to prevent additional financial strain on an industry already struggling with high operational costs and illicit market competition.

 

Shifting The Regulatory Focus

Beyond financial relief, the DCC is actively working to reduce regulatory complexity for operators. This year, the department’s focus is on streamlining cultivation requirements. Currently, cultivators must tag each plant individually in the state’s track-and-trace system—a labor-intensive process that adds significant operational burden.

“We’re looking at ways to bring that into other groupings to track it, still maintain safety and integrity of our system, but not be so cumbersome on that front,” Kellum says.

Jain says this reform is particularly urgent in light of a December 2025 court ruling that found California’s implementation of the METRC track-and-trace system imposed unlawful and excessive burdens on licensees without adequate statutory authority. The decision, he notes, exposed long-standing flaws in how track-and-trace requirements have been administered and underscored the need for a more practical, legally sound approach.

There are also legislative efforts underway to develop a combined activities license. This new license type would allow businesses engaged in multiple activities—such as cultivation, manufacturing, and retail—to operate under a single license rather than maintaining distinct licenses for each activity. The change would eliminate friction points that currently exist when moving products between different license types within the same business.

“Both of those are in development now, they’re not released publicly,” Kellum notes, “but we are developing efforts to get those out.”

 

Combating the Illicit Market

Nearly everything the DCC does is focused on supporting the legal market while suppressing illicit activity, including burner distros that transport products out of state. According to Kellum, this requires a multi-pronged approach that goes far beyond enforcement alone.

“It is a confusing market for consumers and our law enforcement partners,” Kellum acknowledges. The department is working to establish deeper relationships with local governments and local law enforcement entities to clarify the distinctions between legal and illegal operations and build coordinated responses.

The DCC is also requesting additional resources to expand its enforcement capacity, though Kellum stresses the limitations. “We’re not going to enforce our way out of it, but it is a part of that effort,” he says.

Financial support for local enforcement is coming. The Board of State and Community Corrections, which receives funding from the Cannabis Tax Fund, will soon release a $125 million RFP prioritized for illicit market enforcement. This funding addresses resource constraints that prevent local governments from taking action against illegal operators in their jurisdictions.

Kellum believes expanding retail access reduces the illicit market’s foothold by providing legal alternatives for consumers and, by supporting licensed operators with reasonable regulations and costs, keeping them competitive with unlicensed sellers. “Having a legal market that’s functional for our operators supports against the illicit market, and so it’s doing all those things in combination that are really the work we’re trying to do,” says Kellum.

While the illicit market continues to erode legal market revenue, Kellum sees encouraging signs of stabilization. “If you actually look at the units sold at retail, that has continued to go up,” he notes. “However, while the lower prices are better for consumers, it does shrink margins for operators, and that becomes more and more challenging.”

He also pointed to signs that price compression is starting to reverse for cultivators—potential signals that the market is stabilizing. But Kellum is quick to temper optimism. That doesn’t mean the job is done or that the industry is out of the woods. “I just think it reinforces all the things I was describing here and the importance of continuing those,” he said.

 

Navigating the Future

Director Kellum recognizes the critical importance of transparency and clear communication to avoid misperceptions, confusion, or misdirected frustration within the industry.

“I do think it’s really important in all this that we try our best to understand each other and what levers we do control,” Kellum explains. He’s keenly aware that stakeholders often raise issues—such as taxes and local control—that fall outside the DCC’s direct authority. “Those policies and authorities don’t sit with me,” he notes, pointing out that many of these constraints were embedded in Proposition 64 itself and approved by California voters.

This complexity isn’t an excuse, Kellum emphasizes, but it’s essential to understand the context of the challenges. Statutory and regulatory changes require processes, which can be frustrating when the industry needs relief now.

Since stepping into the director role, Kellum has prioritized meeting with industry participants to understand their challenges firsthand and establish clear feedback loops. “I’m not going to be able to do everything each individual asks,” he acknowledges, “but are there themes and areas where we can pick up and make progress together?”

His approach centers on open communication, providing clarity about what the DCC can and cannot control, and consistent execution. “I can’t promise that everything’s going to change tomorrow, because that wouldn’t be realistic,” Kellum says. “What I can say is we know the areas of challenge, we’re putting forth efforts intentionally in those areas of challenge, and we’re hoping that steady progress will get us to the right outcome.”

And if the current strategies don’t deliver the needed results? “We’ll revise what we’re doing and continue to make efforts along those lines,” he says

You can listen to Clint Kellum’s full interview on the Innovating Cannabis Podcast and YouTube.

From The Lab

How Tissue Culture Is Advancing Cannabis Genetics and Global Expansion

By Pam Chmiel
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Not every genetic is suited for every growing environment, production model, or end market. For cultivators, the challenge is not finding new genetics but identifying which breeders align with their goals and whether those genetics are clean, stable, and commercially viable. As demand grows for consistency, disease resistance, and scalability, shortcuts in breeding and cloning are becoming more common. Without proper tissue culture protocols, even elite genetics can carry hidden pathogens that can devastate entire operations.

At MJBizCon, Sergio Picazo, co-founder of California-based Powerhouse, moderated and hosted panel discussions examining how breeders and cultivators source, validate, and scale genetics, and why tissue culture is rapidly becoming an essential tool in modern breeding programs, particularly for breeders looking to scale globally.

Picazo opened one conversation by emphasizing that tissue culture remains underutilized in cannabis, despite being standard practice in other agricultural industries where it is foundational to professional breeding and propagation. Panelist Martin Chase of UMAMI Seed Co. expanded on this point, noting that his team has relied on tissue culture since 2014, well before pathogens such as hop latent viroid were widely recognized. Initially, their focus was on cataloging their genetics library, protecting individual cultivars, and minimizing the footprint required for mother plants.

 

Contaminated Clones Unknowingly Flood the Market

As legal cannabis markets expanded around 2016, many new operators sourced clones from established legal or legacy markets, often without comprehensive pathogen testing. Infected plant material circulated unknowingly for years before cultivators realized that viroids, viruses, and other systemic pathogens were the root cause of widespread crop failures. Powdery mildew, viruses, and viroids traveled easily through shared genetics, exposing a major vulnerability in the industry’s early supply chains.

As outbreaks intensified, breeders and cultivators recognized that pest management practices were no longer enough. The need to prevent disease at the genetic level became apparent, prompting commercial operators to adopt tissue culture to establish truly clean mother plants.

 

Nodal vs. Meristem Culture: Choosing the Right Tool for the Job

According to Chase, not all tissue culture methods serve the same purpose. As pathogens became more prevalent, his team began cleaning up the genetics using increasingly precise tissue-culture techniques, starting with meristem culture. This method involves dissecting a plant down to a tiny cluster of undifferentiated cells roughly one millimeter in size. Because most viruses and viroids do not typically reach this cellular level, meristem culture offers the highest likelihood of producing pathogen-free plants. However, Chase noted that in extreme cases, where infections are deeply embedded, even meristem culture may not fully eliminate disease.

For less intensive needs, nodal tissue culture offers a faster and more cost-effective option. Nodal culture is essentially micropropagation, producing tiny clones from existing vascular tissue. While this approach can help standardize production runs and reduce surface-level contamination, it does not fully reset a plant’s genetic health. Because vascular tissue can still harbor pathogens and endophytic microbes, nodal culture is better suited to maintaining clean cultivars than to rehabilitating compromised ones.

Breeding projects, foundational grandmother stock, or heavily infected plants are best addressed through meristem culture. For stable, repeatedly tested cultivars, nodal culture can support scalable production, provided operators are prepared to restart the process if contamination reappears.

 

Resetting Declining Genetics

Beyond disease prevention, tissue culture plays a critical role in preserving and reviving older cannabis genetics that remain commercially or culturally valuable.

Cannabis is an annual plant, not a perennial. Under natural conditions, plants complete their life cycle, produce seeds, and die. In commercial cultivation, however, elite genetics are cloned and maintained indefinitely, an unnatural process that can lead to gradual degradation over time. Aging mother plants often weaken, lose vigor, or exhibit subtle performance changes that growers may mistakenly attribute to environmental conditions or nutrient programs.

Chase noted that long-term cloning can result in genetic drift, accumulated mutations, and physiological stress, causing cultivars to behave differently under new lighting systems, feeding schedules, or production models. Tissue culture, and specifically meristem culture, offers a way to reset that decline. By regenerating a plant from a tiny cluster of undifferentiated cells, cultivators can effectively return a cultivar to its original baseline, similar to starting again from seed, but without losing the genetic identity that made the plant valuable in the first place.

 

Scalability and Cost Effectiveness

According to Chase, tissue culture offers one of the most powerful advantages for exponential growth. One container becomes two, then four, then eight, and so on. This process dramatically reduces the space required for nursery production. Operators can eliminate 75 to 80 percent of traditional mother space, stack thousands of plants within a very small footprint, and use the same environmental controls already in place. For large-scale operations, this efficiency translates directly into cost savings, operational consistency, and faster expansion.

 

The Path to Global Distribution

As the cannabis industry matures, tissue culture is becoming essential for preventing large-scale pathogen spread. Panelist John Bayes of Green Bodhi emphasized that when genetics is distributed at scale, especially across borders, consistency and cleanliness are non-negotiable. Backing up genetics at the meristem level ensures plant material is uniform, clean, and suitable for international movement, an approach long used across global agriculture.

Chase expanded on how tissue culture enables compliant global distribution. With tissue culture labs operating in Canada, Austria, Germany, and Australia, his team is able to move phytosanitary-certified plant material around the world with relative ease. Because tissue culture plants are shipped in sterile, sealed vessels without growing media, they can bypass many traditional import and export barriers while still meeting quarantine and regulatory requirements.

Unlike seeds, these shipments often include live explants. Once received, facilities with basic lab infrastructure and trained technicians can rapidly scale production. By rooting plants outside the lab environment, operators can quickly transition tissue culture material into plugs that behave like conventional clones, significantly shortening production timelines. While the process requires technical expertise, it allows growers to start with genetically uniform, pathogen-free plants that can be scaled efficiently across diverse environments.

Picazo emphasized that this level of scalability is only possible because of the work done on the front end. By dissecting plants down to meristem tissue and validating cleanliness through multiple stages of testing, breeders can ensure genetic integrity before material ever enters the global supply chain. In an increasingly international cannabis market, tissue culture is emerging as the most reliable pathway for scaling genetics uniformly while reducing the risk of widespread pathogen outbreaks.

 

Despite this progress, the cannabis industry is still only scratching the surface of what tissue culture can offer when compared to advances made in other agricultural sectors. Not every plant responds the same way in tissue culture, and techniques that work for bananas do not automatically translate to cannabis, hemp, or hops. Even so, tissue culture is emerging as a critical tool in the modern cultivation toolbox, helping breeders and cultivators push genetics, consistency, and scalability to the next level.

From The Lab

The Latest CBD Scientific Research From Western Washington University

By Pam Chmiel
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Josh Kaplan, PhD, is a neuroscientist and associate professor in the Behavioral Neuroscience program at Western Washington University, where his lab focuses on optimizing cannabidiol (CBD) based medicines for pediatric conditions. His work examines not only CBD’s therapeutic potential, but also its long-term developmental effects on the brain, an area of growing importance as cannabinoid therapies move deeper into clinical use.

Kaplan’s interest in CBD research began in 2015, when he was asked to evaluate Epidiolex in a mouse model of pediatric epilepsy. The treatment produced significant seizure reduction in cases where other medications had failed. The results were striking and sparked his interest in a deeper investigation of CBD and how it might work in other pediatric conditions.

While different medical conditions require different dosing, Kaplan’s lab is also exploring whether the same medication or formulation could be effective across a range of symptoms by adjusting the dose. “Can we improve CBD-based medicine by expanding that dose window so that, regardless of whether you are trying to treat epileptic seizures or improve social behaviors and communication deficits, a single formulation could be effective?” explained Kaplan.

The team evaluates CBD’s effects by modeling specific behaviors in mice, including anxiety, depression, and social interaction. By testing a wide range of doses, they can pinpoint where therapeutic effects emerge and where they fade.

 

Stress, Brain Development, and CBD

The lab also takes a bottom-up research approach, examining what is happening inside the brain at the cellular level. Many pediatric neurological conditions, including epilepsy and autism, are associated with altered protein expression and disrupted communication between neurons. Kaplan’s team applies CBD, sometimes in combination with terpenes such as beta-caryophyllene and linalool, to examine how these compounds affect molecular signaling and neuronal communication.

The lab uses live slices of mouse brain tissue outside the body and recreates the brain’s natural environment with oxygen, glucose, and essential ions. Researchers can keep neurons alive for hours and directly measure their electrical activity using electrodes. This technique allows the team to observe how CBD alters communication in specific brain regions tied to different conditions.

For example, the hippocampus, often implicated in seizures, can be studied to assess whether CBD dampens excessive neural excitation. Other regions, such as the amygdala and prefrontal cortex, are examined for changes related to anxiety, depression, and cognitive function.

“What is CBD doing there?” asks Kaplan. “We can zoom in on specific regions of the mouse brain and start manipulating them with CBD and other terpenes to see how it alters those communication patterns, which are known to change in characteristic ways across different neurological conditions.”

He explains that with epilepsy or autism, there is a shift in the brain’s balance toward excessive excitation and signaling that can lead to seizures, hypersensitivities, and certain repetitive behaviors characteristic of autism.

“We can see that actually playing out in the cellular communication patterns that we’re observing. Then we might explore what CBD is doing on those patterns. What is beta-caryophyllene doing? What happens when you put them together? That’s the approach we’re taking,” Kaplan said.

 

Proving the Entourage Effect

While anecdotal evidence around the entourage effect is widespread, there is little clinical validation, particularly for combinations of CBD and terpenes rather than THC-based formulations. Kaplan’s lab is beginning to generate early preclinical data indicating promising results for targeted, custom CBD and terpene formulations.

Previous research has shown that repeated stress or trauma during critical developmental periods can alter brain connectivity, leading to long-term behavioral and mental health challenges. In a recent, unpublished preclinical study, Kaplan’s team examined whether CBD could remedy early stress-related effects on brain development. Using an established animal model, the researchers induced early life stress and observed measurable changes in proteins involved in how brain cells connect and communicate.

Following stress exposure, the mice were treated with either CBD alone, beta-caryophyllene alone, or a combination of the two. Neither compound on its own produced meaningful changes in altered protein expression. However, when CBD and beta-caryophyllene were administered together, the combination effectively reversed the stress-induced molecular disruptions.

These findings suggest that cannabinoids and terpenes interact with distinct receptors and signaling proteins, influencing neuronal circuits and communication between brain regions. Kaplan emphasizes that cannabinoids do not “activate” one another; rather, their parallel actions converge to produce coordinated effects across neural networks. This framework helps explain the benefits of combined CBD and terpene treatments, highlighting how multi-target strategies can modulate brain function more effectively than single compounds alone. It is an early step toward understanding which compound combinations and dosing strategies are most effective for specific conditions.

Some studies suggest that removing the olfactory component—such as when terpenes are consumed in edibles—may diminish their effects. Could these benefits be mediated, at least in part, through olfactory processing, which is known to influence emotion and mood? “Why do people wear cologne or perfume? Why do we have scented candles? It makes us feel relaxed and comfortable,” said Kaplan. While earlier experiments demonstrated clear effects with oral ingestion, Kaplan believes that each method of consumption may have its own benefits.

 

Activating Endocannabinoid Expression

Another line of research in Kaplan’s lab examines how different cannabis components influence endocannabinoid expression. Anandamide, often referred to as the “bliss” molecule, is an endogenous cannabinoid that activates the brain’s cannabinoid receptors and plays an important role in mental health and well-being.

In autism, children often have lower levels of anandamide, and raising those levels may lead to improved social behaviors and communication, as well as other quality-of-life measures. Kaplan’s lab tested whether CBD alone would alter anandamide levels using a mouse model of autism spectrum disorder and measured outcomes using mass spectrometry.

They found that CBD and beta-caryophyllene increased anandamide levels on their own. “You put the two together and think you’ll get a massive effect,” Kaplan explained. “Actually, they contradicted one another and led to a reduction.”

He added, “The most exciting part about this field is the complex profile of how these different chemicals are working, and the targets they’re acting on in the brain and body. It creates a challenge, because it’s not as straightforward as we think.”

 

Are Some Terpenes More Effective Than Others?

Kaplan’s lab began its terpene investigations with beta-caryophyllene, which is widely considered the only terpene known to directly interact with the endocannabinoid system. It can activate CB2 receptors in a manner similar to endogenous cannabinoids such as anandamide and 2-AG, as well as THC.

While Kaplan’s team has observed therapeutic benefits from beta-caryophyllene, they are also examining other common terpenes, including linalool, myrcene, and others. Among these, linalool has emerged as a standout in preclinical testing, showing strong anxiolytic effects, particularly in behavioral models of anxiety.

Kaplan’s research has also revealed pronounced sex based differences in terpene response. In one published study, mice were exposed to vaporized linalool or myrcene for short periods. Female mice consistently showed reduced anxiety and actively sought out the terpene exposure. Male mice, by contrast, initially showed positive benefits from brief exposure, but displayed heightened anxiety under longer exposure conditions

When exposure time was reduced to a single brief dose, male mice exhibited the same anxiety-reducing benefits as females. The findings suggest that females may be less sensitive to terpene intensity or odor, while males may reach sensory saturation more quickly. These differences highlight dosing and exposure thresholds as critical variables in terpene-based formulations.

Kaplan’s lab is also exploring the biological mechanisms underlying these sex specific responses, with a particular focus on estrogen. Existing evidence indicates that estrogen modulates the endocannabinoid system, and Kaplan’s team has found that CBD increases anandamide levels in the brain more strongly during periods of elevated estrogen. This hormonal influence may help explain why cannabinoids and terpenes produce different effects across sexes and hormonal cycles.

 

What’s Next for Kaplan’s Lab?

With foundational studies now established, Kaplan is turning his attention to deeper molecular and physiological mechanisms to better understand what is happening beneath the surface and to help inform more reliable cannabinoid-based medicines.

One key area of investigation is the gut-brain axis. Kaplan’s team is exploring how CBD and related compounds influence the gut microbiome and immune signaling, both of which play a critical role in regulating brain inflammation and neurological health. To do this, the lab is collaborating with immunology and microbiome expert Annalise Snyder at Western Washington University to characterize how cannabinoid based therapies affect immune responses in the brain that may contribute to disease pathology.

The lab is also integrating computational neuroscience into its research strategy. In collaboration with computational neuroscientist Cam Harris, Kaplan’s team is using brain network modeling to simulate how different brain regions communicate and how cannabinoids and terpenes alter those signaling patterns. These models are designed to predict which compound combinations are most likely to be effective for specific conditions, such as epilepsy or autism, before moving into experimental testing.

Rather than testing an overwhelming number of possible cannabinoid and terpene combinations, the team can narrow the field to the most promising formulations using advanced predictive modeling, thereby providing a more precise approach for cannabinoid medicine.

Are Triploids The Next Big Thing In Cultivation?

By Pam Chmiel
1 Comment

It all starts with genetics. The possibilities for manipulating the cannabis plant through breeding and cultivation are expanding rapidly, and advancements in methods for achieving optimal plant expression are accelerating as the industry moves into 2026. Breeders and cultivators are increasingly banding together to share knowledge and resources, while high-tech equipment and analytical tools are being deployed to deepen understanding of the plant’s biochemistry.

As cultivation operations scale, operators are looking for ways to achieve higher yields, stronger plant vigor, improved disease resistance, and, most importantly, consistent outcomes from plant to plant. One approach is polyploid breeding, specifically the development of triploid cannabis plants.

John Keating, founder of Tesoro Genetics and leader of the genetics program at Advanced Nutrients, has been at the forefront of this effort. While triploids are widely used in large-scale agriculture, most consumers unknowingly encounter them in seedless fruits like watermelon and bananas. The approach remains relatively new to the cannabis industry and far from simple to execute.

According to Keating, his team spent several years refining the process before achieving reliable results and launching a line of triploid seeds at MJBiz 2025. I sat down with him to better understand how triploid cannabis works, why it matters for commercial cultivation, and what it could mean for the future of genetic innovation in the industry.

To understand why triploids are gaining traction, it helps to start with a basic explanation of ploidy.

Diploids, Triploids, and Tetraploids—Explained

Most plants, including cannabis, are diploid, meaning they carry two sets of chromosomes (2N)—one inherited from each parent, Keating explains. Each chromosome contains genes, and each gene exists in two copies, known as alleles, which influence traits such as plant morphology, cannabinoid production, and secondary metabolite expression.

During normal reproduction, a diploid plant produces gametes—pollen and ovules—that each contain a single set of chromosomes (1N). When pollen and ovule fuse during fertilization, those chromosome sets recombine, restoring the diploid state (2N) in the embryo.

“That’s the standard biological cycle,” Keating says. “You split the genetic material in half to make gametes, then bring it back together to rebuild the diploid organism.”

Polyploid breeding intentionally disrupts that cycle.

According to Keating, breeders can induce chromosome doubling in a diploid plant to create a tetraploid (4N) plant with four sets of chromosomes. Crossing that tetraploid with a standard diploid produces a triploid (3N) offspring.

 

Why Extra Chromosomes Matter

Changing the number of chromosome sets has immediate effects at the cellular level.

Polyploid plants, particularly tetraploids, have larger cells than diploid plants, Keating explains. Larger cells often correlate with larger leaves, thicker stems, and bigger flowers. More importantly for cannabis, polyploidy increases gene dosage, meaning the number of copies of key biosynthetic genes available for expression.

As Keating points out, the genes responsible for cannabinoid biosynthesis—THCA synthase and CBDA synthase—are located on chromosome 7 and are present in two copies in a diploid plant. In a tetraploid plant, there may be four.

“If all four copies are THCA synthase, you’ve got a strong THC producer,” Keating says. “If they’re all CBDA, you’ve got a CBD-dominant plant. Or you can have a mix, which produces a mixed cannabinoid profile.”

With more copies of these synthase genes available, the plant has a greater capacity to produce cannabinoids and other secondary metabolites, such as terpenes and flavonoids.

 

Where Triploids Create Commercial Value

While tetraploids offer enhanced metabolic potential, Keating says triploids are often the commercial end goal.

Triploid plants are typically sterile or near-sterile, meaning they produce little to no viable pollen or seeds. For cultivators, this can significantly reduce the risk of accidental pollination, one of the most persistent threats to flower quality in commercial facilities.

“When you remove reproductive pressure,” Keating explains, “the plant can redirect more energy toward resin production and secondary metabolites.”

That combination of enhanced gene dosage from polyploid breeding and the operational benefits of sterility is why Keating and other advanced breeders believe triploid cannabis could represent the next major leap in cultivation.

 

Where Triploid Breeding Can Go Wrong

While triploid cannabis holds significant promise, John Keating cautions that polyploid breeding is inherently unstable if it’s not executed carefully, which is why many efforts fail.

The first challenge arises at the tetraploid stage. When breeders force a diploid plant (2N) into a tetraploid state (4N), they’re pushing the plant into a condition it does not naturally want to maintain. Cells become larger, chromosome density increases, and unless every cell successfully converts to tetraploidy, the plant can end up as a mixoploid, a mosaic of diploid and tetraploid cells.

“That mixed state is a problem,” Keating explains. “Because diploidy is the plant’s natural condition, any remaining diploid cells can eventually dominate.” Over time, that instability can cause the plant to revert toward diploidy, undermining the entire breeding effort.

Gene dosage compounds the risk. Doubling chromosomes increases the

number of all genes, potentially amplifying undesirable traits. If a plant carries latent issues, such as a tendency toward hermaphroditism, those traits can become more pronounced when additional gene copies are introduced.

According to Keating, breeders who push lines too aggressively to maintain tetraploidy can also encounter low germination rates, inbreeding depression, and inconsistent phenotypes. The physiological stress of maintaining an enlarged cellular state appears to increase the likelihood that these problems will surface.

The key, he says, is stabilization.

Successfully working with polyploid cannabis requires time, repeated selection, and careful environmental management to allow plants to adapt to their new ploidy level.

 

Early Results—and What Still Needs to Be Proven

Despite the challenges, Keating says the performance gains he’s seen in commercial settings are incredible.

According to Keating, triploid cannabis consistently shows increases in potency and yield. While not confirmed, he plans to work with a research university to investigate whether polyploid plants develop thicker trichome walls that could help retain volatile secondary metabolites after harvest.

“That’s a big deal if true,” Keating says. “Terpenes and other secondary metabolites off-gas hard and fast once the plant is cut. If the trichome structure is physically holding more of that in, that has major implications for post-harvest quality.”

While that hypothesis still needs peer-reviewed validation, Keating says yield improvements are already showing up clearly at scale.

“What we’ve seen with the plants we’ve actually released into the world is dramatic increases in yield,” he explains. In multiple large-scale cultivation environments—not just isolated test lights—operators are reporting production levels approaching six pounds per light, a benchmark Keating says he had previously only heard discussed in theory.

“This isn’t one light or two lights,” he adds. “This is happening across larger facilities.”

The team plans to enter into clone licensing agreements with major players in different regions and work hand in hand with them. We plan to keep it limited, because we don’t want to flood the market like what happened with Blue Dream. As for seeds, they are producing rock-solid batches. We’ve picked our favorite ones that perform across all environments, are high-yielding, and have great appeal.

 

For the future, Keating says we will see double haploids, genuine F1s, further polyploidy, and rapid modification via gene editing.

Listen to John Keating talk about their work with triploids on the Innovating Cannabis Podcast.

 

 

 

New York’s Cannabis Boom Is Real, But So Are the Risks

By Hirsh Jain
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The Most Exciting US Market 

No cannabis market in the United States has experienced a more compelling growth trajectory over the past two years than New York. After a halting and often-criticized launch, the state’s legal adult-use market has accelerated at an unmatched pace. 

In 2023, New York generated a paltry $100 million in legal cannabis sales, far short of its expected market potential of (at least) $5 billion. In 2024, that figure expanded to approximately $900 million, nearly a tenfold increase. By 2025, sales climbed again to almost $1.8 billion, nearly doubling year over year.

Looking ahead, cannabis sales have the potential to approach $2.5 billion in 2026, reinforcing New York’s position as the most exciting growth market in U.S. cannabis. But rapid growth at the market level does not guarantee success for individual operators. 

In fact, the very forces driving New York’s expansion are also introducing a set of structural risks that cannabis businesses must be prepared to navigate.

Growth Fueled by Store Proliferation, and the Consequences

New York’s sales surge has been driven primarily by the rapid expansion of retail access. At the start of 2024, the state had approximately 50 licensed dispensaries open for business, far too few to adequately serve a state with a population of 20 million people.

By the end of 2024, that number had grown to more than 275 dispensaries, more than a fivefold increase. That torrid growth continued the next year; by the end of 2025, there were more than 525 dispensaries open in New York. Projections suggest the state will have more than 750 licensed stores by the end of 2026.

This dramatic increase in storefronts has undeniably improved consumer access, grown the legal market, and helped displace illicit sales. But it has also begun to strain retail economics. According to the New York Office of Cannabis Management (OCM), annualized retail sales per store declined from roughly $5 million in Q3 and Q4 of 2024 to approximately $3.8 million in Q2 and Q3 of 2025. 

Whether this decline persists remains to be seen. And it may be that there are other factors besides additional dispensaries driving the reduction in per-store sales. However, the recent decline has been significant and suggests that competition on a per-store basis may be intensifying faster than demand is growing.

If so, the implication is clear: simply opening a dispensary is no longer sufficient for financial success in New York. Retailers now face a much more competitive environment in which weak business practices, poor inventory management, undifferentiated product selection, or subpar customer experience can quickly threaten viability. 

The next phase of New York’s market will reward operators who invest in brand, service quality, and customer loyalty, and punish those who assume market growth alone will carry them forward.

Supply-Chain Risk and the Danger of a Credit Bubble

Notably, retail pressure may not stay confined to the retail tier. As some New York dispensaries struggle to maintain margins and cash flow, downstream effects are already emerging. In some cases, retailers have fallen behind on payments to distributors and manufacturers, creating stress across the cannabis supply chain.

The industry has seen this movie before. In California, the collapse of distributor HERBL in 2023 sent shockwaves through the market, leaving cultivators and manufacturers with millions in unpaid receivables. Many of these businesses ended up folding along with HERBL.

Perhaps this is too alarmist. New York, one might argue, is not California. But the risk is analogous. Some distributors in New York are already reporting difficulties collecting from retailers, raising concerns about a potential credit bubble forming beneath the surface of the market’s headline growth.

As such, all participants (retailers, distributors, brands) need to exercise caution in choosing partners, setting payment terms, and managing credit exposure. Growth without discipline can quickly become destabilizing, especially in a young market where balance sheets are still fragile. 

At a minimum, New York operators should monitor the OCM delinquency list, also known as the “C.O.D.” (cash on delivery) list, to identify businesses that have failed to pay suppliers on time and help ensure they do not become entangled with business partners that are not creditworthy.

Discounting Comes With Rules

In November 2025, New York’s Cannabis Control Board (CCB) approved updated marketing rules that allow dispensaries, for the first time, to offer traditional retail promotions, including discounts, coupons, loyalty programs, reward points, bundled pricing, and temporary sales. As they face increased competition, New York retailers may attempt to remain competitive through this newly allowed practice of discounting. 

But discounting in New York is far from a free-for-all, and operators who misunderstand the rules risk costly compliance violations. For instance, cannabis products may not be sold below their “market value”, defined as the minimum retail price, set at 1.5 times the wholesale price paid by the retailer for the discounted product. 

In addition, when a product is discounted, the retail excise tax must still be calculated on the pre-discounted price. If a $10 item is discounted to, say, $8, the excise tax is still applicable to the pre-discounted price of $10.

This requirement means retailers must ensure their POS systems are properly configured to handle discounted pricing without underpaying taxes. This is a nontrivial operational challenge for businesses already stretched thin.

The Illicit Market Still Looms Large

Even as the legal market grows in New York, the continued presence of unlicensed cannabis retailers remains a major threat to legal operators. Illicit stores continue to siphon demand, depress legal prices, and undermine the regulated market’s ability to fully realize its potential. 

By the OCM’s own admission, enforcement against illicit cannabis operators stalled in 2025 – with just 2,017 “enforcement actions” undertaken in 2025, compared to 5,215 such actions undertaken in 2024. 

The OCM has cited the completion of a well-funded 2024 multi-agency enforcement task force as a key reason for the dip in enforcement in 2025. This lack of enforcement against unlicensed activity helps explain much of the 25% decline in annualized retail sales per store – from $5 million to $3.8 million – that occurred in New York in 2025.

Given this concerning reality, legal operators must immediately press policymakers, particularly Governor Kathy Hochul and New York City Mayor Zohran Mamdani, to enforce existing laws against illegal cannabis sales. Such a commitment was glaringly absent from Governor Hochul’s “State of The State” address on January 13th, where other cannabis priorities were mentioned but New York’s growing illicit cannabis market was not.

And the case for enforcement should not be framed solely as an industry concern. Under the Marijuana Regulation and Taxation Act (MRTA), passed with much fanfare in March 2021, legal cannabis tax revenue is earmarked for non-profits, community organizations, and social programs. And so, any lapse in enforcement that politicians enable directly jeopardizes those commitments.

Legal cannabis businesses should be proactive in communicating this message, in partnership with the local non-profits and social organizations that depend on cannabis tax revenue. Working together, these parties should make clear that enforcement against illegal activity is essential to delivering on the social justice goals that political leaders like Governor Hochul and Mayor Mamdani so frequently and poetically invoke in their discussion of cannabis policy on the campaign trail.

And they should make clear that rhetoric alone is not enough from politicians. They must insist, vocally, that sustained enforcement is the only way to protect the legal cannabis supply chain and the long-promised public benefits tied to it.

METRC, Product Inversion, and the Integrity of the Supply Chain

Another looming challenge is the continued risk of product inversion, cannabis from outside New York entering the legal supply chain. This threatens compliant operators, particularly in-state brands that are already operating with limited capital and thin margins.

The ongoing implementation of METRC, currently being challenged by a recently filed lawsuit, is essential to protecting the integrity of New York’s market. But it must be handled carefully. 

Going forward, the state needs to provide operators, especially smaller ones, with adequate guidance, training, and technical support to comply with the METRC system. A chaotic or poorly supported rollout could disrupt the supply chain and inflict irreparable harm on businesses that are attempting to follow the rules.

At the same time, indefinite delays in METRC implementation would prove problematic. Without a fully operational track-and-trace system, bad actors will be able to continue to invert illegal product and legal operators would be disproportionately harmed. New York must thread the needle: implementing METRC effectively, without perpetual delay, while ensuring it does not become another unintended obstacle to legal commerce.

In addition, S.8951, a bill recently introduced by Senator Jeremy Cooney, can also help keep illicit cannabis out of New York’s regulated market. As the Empire State Green Standard Alliance, which advocates for New York cannabis consumers, has noted, the bill clearly defines cannabis inversion, makes it explicitly illegal, and backs enforcement with real consequences, including major financial penalties, license revocation, lab accountability, personal liability for responsible executives, and strong whistleblower protections.

Taken together, these measures, if successfully implemented, can help address the inversion that has tainted New York’s legal cannabis market.

A Market Worth Betting On, With Eyes Wide Open

The growth in New York’s cannabis market over the past two years has been extraordinary, and the runway ahead remains long. But this is no longer a market where every operator will rise with the tide. The next phase will separate disciplined, well-capitalized, customer-focused businesses from those unprepared for competition, compliance, and financial pressure.

For operators willing to navigate these challenges thoughtfully, New York remains one of the most important cannabis opportunities in America. For those who mistake growth for inevitability, it may prove far less forgiving.