🧪 Colorado Tightens Its Own Marijuana Supply Chain Against Hemp Inversion

Built by a former cannabis regulator, Policy, Decoded helps operators read the policy terrain before it shifts beneath their feet.

Today's edition is sponsored by Azure Printed Homes. Their support keeps these briefings free and focused on what actually matters.

Before we get into today, a correction. Yesterday's edition included a brief summarizing a GreenState essay by NCIA board member Kasey Kollross on cannabis and hemp trade alignment, and our summary conflated two things Kollross kept distinct. The Commission is a specific working group that reached consensus on ten shared policy principles, documented in a Marijuana Moment op-ed by NCIA Board Chair Adam Rosenberg and cannabis attorney Eric Berlin. Separately, Kollross credited NCIA, the Hemp Beverage Alliance, the U.S. Hemp Roundtable, the Hemp Industry & Farmers of America, and the Coalition for Adult Beverage Alternatives as organizations each approaching alignment work from different angles. Our brief implied those five organizations were participants in the Commission. They are not, and Kollross did not write that they were. The corrected brief is live on the web version of yesterday’s edition. Thanks to Kollross for the flag.

And with that, to today. Colorado spent the day tightening its marijuana supply chain from the inside, going after licensed operators who have been slipping cheap hemp-derived THC into the regulated channel. Maine's House voted down medical cannabis testing for what feels like the tenth time, with "where are the bodies" now standing in as a governing philosophy. New Jersey redrew its hemp line but left liquor-store beverages in place through the federal deadline, which is the clearest signal Trenton could send to DC about which lanes should stay open after November. A Missouri hemp operator is making a principled one-plant argument in Marijuana Moment against a federal clock that is about to flatten most of the distinctions he wants to preserve. The hemp-marijuana boundary is moving in every direction at once, and the operators reading this closely are the ones who will still be standing when it settles.

🧪 Tightening from the inside
🧫 Where are the bodies
🌿 A door left open for DC
🎙️ A new Hybrid, with a pickle

Colorado's Marijuana Enforcement Division issued a bulletin Monday announcing emergency rulemaking to crack down on licensed marijuana operators using hemp-derived THC and banned chemical synthesis methods to manufacture products then sold as marijuana. The agency cites "serious risk to public safety" and a "pattern of noncompliance" in seed-to-sale reporting that points to systematic tax avoidance. This is the regulatory follow-through to the January ProPublica and Denver Gazette investigation that found three of fourteen dispensary vapes tested contained compounds and chemical residues experts said were indicative of hemp. One major manufacturer surrendered its marijuana license in January 2025 after a methylene chloride contamination case, and two more operators have since been suspended for using hemp-derived THC. Read this partly as Colorado tightening its marijuana supply chain against inversion. Colorado has always been home to pioneers in both the cannabis and hemp lanes, and it has kept a fairly restrictive beverage allowance for years. Now the state is moving to police its own dispensary channel from the inside, because the wholesale economics of converting cheap hemp CBD into THC will keep tempting regulated operators to cheat until the cost of getting caught exceeds the margin. Colorado built the seed-to-sale model the rest of the country copied. It is now publicly conceding that model can be gamed when the price gap is wide enough, and other mature markets should be reading this carefully. (The Gazette; ProPublica; Denver Gazette)

Maine's House voted today against LD 1847, the bill that would have required batch testing and tracking for the state's medical cannabis caregivers, defeating Rep. Anne Graham's Graham-Malon amendment 102 to 43, rejecting a second regulatory approach 74 to 71, and then voting unanimously to send the bill out as "ought not to pass." The bill now heads to the Senate, which could vote as early as Monday on any of the three regulation tracks or concur in killing it. The structural picture matters because this is not one fight. Graham and Rep. Marc Malon backed the strictest version, batch testing with exemptions for the smallest caregivers as long as products are labeled untested. Committee Chair Sen. Craig Hickman proposed audit testing as a less burdensome alternative, which Mark Barnett and other industry voices supported while opposing the bill's Metrc-based tracking requirements. Rep. David Boyer opposed all versions and asked from the floor, "Where are the bodies? Where is the harm?" That is the actual defense on offer for keeping medical cannabis free from contaminant testing. Not a reasoned argument about thresholds or cost burden, but a dare. A 2023 Office of Cannabis Policy report found 45 percent of untested medical cannabis would fail adult-use standards. Hundreds of suspected illegal grows tied to Chinese transnational criminal groups have moved into Maine's lightly regulated medical market. Former Senate President Troy Jackson, now running for governor, framed the bill as a giveaway to corporate operators at the expense of caregivers, which is a familiar Maine politics move that has the effect of keeping a medical program free from a basic public health expectation in the name of craft. The Senate vote is now the whole game, and it should not be this close. (News Center Maine; Press Herald; Spectrum News)

New Jersey's ban on infused or intoxicating hemp flower took effect today, pulling the category off shelves at CBD shops, smoke shops, convenience stores, and gas stations. Non-beverage hemp products are now capped at 0.4 milligrams of THC, hemp plant material cannot exceed 0.3 milligrams of THC, and the Cannabis Regulatory Commission has published FAQs on the change. The carve-out is the signal. Liquor stores can still sell THC drinks until November 13, 2026, which tracks the federal deadline. Trenton is not eliminating intoxicating hemp. It is declaring which formats and channels it wants preserved while the federal picture settles. And the beverage-in-liquor-stores carve-out is a message to Washington as much as to operators. New Jersey is telling DC there is real interest in keeping at least some lanes of intoxicating hemp open, even as the state tightens everything else. Whether that signal lands in the implementation of the November ban is the next question. (Heady NJ)

⚖️ Ohio's hemp fight keeps escalating on two tracks. Cycling Frog's attorney Andrew Mayle has asked the Sandusky County court to certify Judge Jeremiah Ray's temporary restraining order as a statewide class action, which would effectively suspend SB 56's hemp provisions across Ohio until the Commerce Clause question is resolved. Meanwhile, Cincinnati breweries including Fifty West and Rhinegeist are reporting millions in lost revenue and workforce cuts after the ban pulled hemp-derived THC beverages off shelves. The legal and economic pressure is converging. The class certification hearing is the next real inflection point. (Marijuana Moment; Cincinnati Business Courier)

🧒 California's old legalization pitch is back under pressure. A Capitol Weekly opinion piece by Youth Forward Executive Director Jim Keddy argues that California weakened the safeguards and public-benefit funding voters were promised under Proposition 64, pointing to tax changes and rising poison-control calls involving young children. Once critics frame the fight as a broken voter bargain rather than a new prohibition push, the politics get harder for Sacramento to wave away. (Capitol Weekly)

A new Marijuana Moment op-ed by Missouri hemp operator John Grady argues that legislatures are using real abuses in the hemp market as cover for something broader: routing intoxicating cannabinoid sales away from independent hemp retailers and toward licensed marijuana channels. He points to Missouri's HB 2641, accuses Texas regulators of trying to accomplish administratively what lawmakers could not finish legislatively, and argues that workable middle-ground frameworks already exist in places like Minnesota through age-gating, testing, labeling, and serving limits instead of blanket elimination. His proposed answer is a one-plant framework with common standards for all intoxicating cannabinoids and no forced dispensary routing, tied to the One Plant Alliance and federal proposals such as the Cannabinoid Safety and Regulation Act and the Hemp Planting Predictability Act. The harder read is that many states are routing intoxicating cannabinoids back to the marijuana channel because that is where THC will live after November when the federal hemp definition narrows. Consumers care less about the legal pathway than about whether the cannabinoids are present and the product is clean. Grady is right that consolidation is becoming the design rather than a side effect. He is also arguing uphill against a federal clock that is about to collapse most of the distinction he wants to preserve. (Marijuana Moment)

💼 Connecticut's cannabis money is getting more defensive. CT Insider reports that license holders and subsidiaries spent a combined $743,408 on Hartford lobbying in 2025 and 2026, down from a peak of $2.6 million in 2021 and 2022, with Fine Fettle, Curaleaf, and Theraplant all pulling back from earlier levels. The fights have narrowed to potency caps, testing rules, and tax reform while sales stay flat and more retail outlets divide the same pie. House Majority Leader Jason Rojas notes that lobbying is one of the few government-relations tools available to operators treated as state contractors and barred from individual contributions. The money is still in the building. It is just no longer there to dream big. (CT Insider)

🏛️ Rhode Island's rollout is now costing applicants real money. Following Judge Melissa DuBose's preliminary injunction against the state's 51 percent in-state ownership requirement, applicants who invested before the licensing freeze are speaking in specifics. Andre Dev says he is locked into lease and site-control costs with nothing to show for it. Asher Schofield reports spending at least $100,000 pursuing a worker cooperative license that may now sit indefinitely. Eight incumbent retailers carried over from the medical program generated roughly $120 million in 2025 while new entrants remain frozen. At some point, a rollout meant to expand participation starts functioning as a gate. Rhode Island is close to that line. (Rhode Island Current; Rhode Island Cannabis Control Commission)

A new Susquehanna Polling & Research survey found that 69 percent of likely Pennsylvania voters support regulating and taxing adult-use cannabis for adults 21 and over, climbing to 72 percent when the framework includes product testing and youth-access protections, and 89 percent support restricting unregulated intoxicating THC products to licensed state-regulated businesses. Whether any of that popularity actually matters in Harrisburg is the real question. Governor Josh Shapiro wants legalization, has publicly tied revenue expectations around it in his budget framing, and still cannot move a chamber. State Sen. Dan Laughlin's SB 49 and Philadelphia Council Majority Leader Katherine Gilmore Richardson's local enforcement push both sit within the coalition the poll describes, which is order, licensing, consumer protection, and clearing the gray market. The legislature seems content to let the devil be the details. Popular opinion has been on the board in Pennsylvania for years. The state has been tripping over itself toward legalization just as long. (City & State Pennsylvania)

Health and Human Services Secretary Robert F. Kennedy Jr. and CMS Administrator Mehmet Oz have asked a federal court to dismiss the lawsuit challenging the administration's Medicare hemp coverage initiative, arguing the anti-cannabis groups behind the case lack standing. The government's filing says the plaintiffs are objecting to a voluntary program they dislike rather than suffering any legally cognizable injury, and draws a bright line between lawful hemp and federally illegal marijuana. This is an early test of whether the administration will consistently defend hemp access through formal legal channels when prohibitionist groups try to collapse hemp and marijuana into the same bucket. The program itself allows eligible providers to furnish certain hemp-derived products under a shared-savings model, with products capped at 0.3 percent delta-9 THC by dry weight and up to 3 milligrams of total THC per serving, and no new federal appropriation is created. The signal to the court is plain. Congress drew the line. Opponents do not get to erase it through litigation. (Marijuana Moment)

💸 AYR Wellness has begun transferring its operations into a new entity built by its senior lenders. The April 10th closing funded a new $275 million senior secured exit facility at 13 percent interest, backstopped by Millstreet Capital Management, with a 24-month PIK option and a five-year maturity. A pro rata portion of AYR's $50 million bridge facility rolled into a take-back facility. The new entity, Arboretum Bidco, was established by AYR's senior secured noteholders and will operate under the AYR Wellness trade name, starting in Virginia with other states to follow as regulators sign off. AYR itself continues court-supervised wind-down under Canada's CCAA. In a healthier industry, restructuring buys operators time. In cannabis, it increasingly settles who owns the future after equity is wiped out and the lenders take the wheel. (GlobeNewswire; Cannabis Business Times)

The Nebraska Medical Cannabis Commission approved the last of four cultivator licenses yesterday and finalized emergency regulations following its February public hearing. The manufacturer application process still has no timeline. Advocate Bill Hawkins told the commission that no Nebraska physician is currently able to recommend medical cannabis without fear of losing their license through Health and Human Services, which means the program can stand up cultivation and emergency rules and still fail to function for patients on day one. The commission also discussed hiring an executive director and retaining outside legal counsel, with Commissioner J. Michael Coffey framing the move as an effort to distance the body from the Nebraska Attorney General's office and avoid conflicts of interest. Interim chair Lorelle Mueting is steering the process toward the May 11th meeting. Nebraska has been handicapped throughout implementation, between executive-branch hostility and thin administrative infrastructure, and none of that is going to change on its own. But the commission can still roll out a working medical market for Nebraska patients if it sequences the remaining licensing decisions cleanly, gets physician legal protections on the board, and secures the political and budgetary support it needs to actually operate. The supply side is largely in place. The rest is a matter of whether the state is willing to let the program function. (Lincoln Today)

🎙️ New episode of The Hybrid today. Erik Gundersen and I sat down with Willy Vlasic of Vlasic Labs - yes, the pickle family - on the CMS pilot, intoxicating hemp, social justice, and what a legacy consumer-brand instinct looks like inside cannabis. (The Hybrid)