🎭 DEA's Rescheduling Vanishing Act, CT's $2.5M Cannabis Fraud, Testing Labs Sue for $1B

Built by a former cannabis regulator, Policy, Decoded is your high-signal daily briefing for operators, investors, and policymakers navigating the collision of law, regulation, and business.

Thanks to today’s sponsors at HubSpot and the journalists who keep us informed about the policy developments that matter most to your business. While DEA Administrator Terrence Cole makes rescheduling disappear from his official priorities, state-level enforcement actions reveal both the promise and perils of cannabis market maturation. From Connecticut's aggressive pursuit of licensing fraudsters to a billion-dollar lawsuit exposing systematic testing equipment failures, this week's intelligence demonstrates why federal uncertainty creates both opportunity and risk for strategic operators.

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📌 What Happened: Terrence Cole, sworn in last week as DEA Administrator, released his official strategic priorities that completely omit marijuana rescheduling despite telling senators in April it would be "one of my first priorities." His eight-point framework focuses on anti-trafficking enforcement, Mexican cartels, fentanyl supply chains, and cryptocurrency, with no mention of cannabis. Meanwhile, the rescheduling process remains stalled six months after hearings were paused, and the administrative law judge overseeing it has retired, leaving the entire matter to Cole's discretion. (Marijuana Moment)

💡 Why It Matters: Strategic priorities documents aren't wishful thinking, they're budget blueprints and political roadmaps. What doesn't make the list doesn't get resources, staff attention, or political cover when conflicts arise. Cole's omission effectively shelves rescheduling while providing plausible deniability about his confirmation hearing commitments. The timing aligns perfectly with House appropriators approving language to block DOJ from rescheduling, creating a convenient political excuse for inaction.

🤠 Texas House Files Hemp Ban Despite Governor's Push for Regulation

Rep. Gary VanDeaver filed HB 5, a companion to the Senate's SB 5 that would ban all consumable hemp products with any detectable THC and criminalize possession as a Class B misdemeanor with up to 180 days jail time. The move defies Gov. Greg Abbott's continued calls for regulation rather than prohibition, with Abbott recently reiterating support for products "below three milligrams of THC content" while opposing "a total ban" on hemp products. Abbott previously vetoed an identical measure during the regular session after industry advocates delivered over 100,000 petition signatures, but lawmakers are testing his resolve during the current special session. The disconnect between Abbott's stated position and legislative action creates uncertainty for Texas's hemp industry, which employs an estimated 53,000 people and faces potential decimation under the proposed ban. The bills allow only CBD and CBG products, meaning even full-spectrum CBD oil would become illegal, highlighting the legislature's preference for prohibition over Abbott's compromise approach. (Marijuana Moment)

🏫 New York Forces 150+ Cannabis Operators to Relocate After Measuring Schools Wrong

New York's Office of Cannabis Management informed nearly 200 cannabis dispensary license holders and applicants they must relocate because the agency miscalculated proximity to schools, measuring distances from entrances rather than property lines as required by the 500-foot buffer rule. Acting Executive Director Felicia Reid sent apologetic letters to 105 license holders (53 in NYC) and 47 applicants, acknowledging the agency's error while noting 43 affected licensees aren't operational yet. The measurement mistake forces operators who invested based on state approval to shoulder relocation costs, with the Hochul administration now pursuing legislative solutions to grandfather affected dispensaries. OCM's proximity miscalculation adds another embarrassing chapter to New York's troubled rollout, though discovering that 62 affected dispensaries are already operating creates the kind of legal complexity that makes regulatory lawyers nervous. If you're operating in New York, check your mailbox, because OCM's cleanup efforts may not be finished yet. (City & State NY)

⚖️ Connecticut AG Seeks $2.5M in Cannabis License Fraud Scheme

Connecticut Attorney General William Tong filed suit against MAKECTBETTER LLC and associates Michael Tedesco and Zafir Iqbal, alleging they defrauded up to 70 businesses by selling fake cannabis licenses for $25,000 to $50,000 each through a nonexistent state "pilot program." The defendants allegedly forged Department of Consumer Protection documents and falsely claimed authorization from the AG's office, with Tedesco telling shop owners "he knew people in high positions in state government." Tong is seeking a $2.5 million prejudgment remedy to freeze assets and prevent the defendants from "offloading or shifting resources to evade accountability." The brazen scheme highlights ongoing enforcement challenges in newer cannabis markets where desperate retailers remain vulnerable to licensing scams. Connecticut's aggressive response signals that state AGs are prioritizing prosecution of fraudulent licensing schemes that undermine regulated market integrity. (CT News Junkie)

🎪 Trump Backs Cannabis Champion for RNC Chair While DEA Chief Ignores Rescheduling

President Trump endorsed Florida state Sen. Joe Gruters for Republican National Committee chairman, despite Gruters being a vocal marijuana legalization advocate who sponsored Amendment 3 and appeared in pro-cannabis TV ads. The endorsement creates fascinating political theater: Trump simultaneously backs a legalization champion for party leadership while his DEA Administrator completely omits rescheduling from official priorities. DeSantis already snubbed Gruters for Florida CFO specifically citing his cannabis advocacy, telling reporters he wouldn't appoint him even if "George Washington rose from the dead" and recommended it. Gruters previously met with Trump and Trulieve's CEO before Trump's Amendment 3 endorsement, positioning himself as the bridge between cannabis industry interests and GOP politics. The appointment could signal Trump's willingness to elevate cannabis reform within Republican Party infrastructure, even as his administration appointees actively work against it. (Marijuana Moment)

🌿 Colombia Moves to Prescription-Based Cannabis Access While U.S. Stalls

Colombia's Justice Ministry released a draft decree allowing pharmacies to dispense psychoactive cannabis flower with medical prescriptions, marking the country's most significant cannabis reform since beginning exports in 2021. The move permits patients to legally purchase and consume flower form cannabis for conditions like chronic pain and Parkinson's disease, building on a decade of gradual liberalization that began with medicinal derivatives. Liberal Party Congressman Juan Carlos Losada called it "a positive step, but one that arrives very late," noting the lack of recreational provisions and warning that final regulations could take six months, leaving implementation to a future administration. Colombia already exports medicinal cannabis to over a dozen countries including Germany, Portugal, and Australia, leveraging ideal growing conditions that position it as a global supplier. The prescription model offers an interesting regulatory pathway that sidesteps full recreational legalization while expanding patient access, providing a potential template as other Latin American countries consider cannabis reforms. (Colombia One)

🥝 New Zealand Bans Medical Cannabis "Advertising" Including Patient Education

New Zealand's MedSafe introduced strict guidelines prohibiting medical cannabis clinics from advertising THC or CBD products, distributing educational materials about medical cannabis, or displaying signage suggesting they supply cannabis, with violations carrying up to $100,000 fines or six months in prison. The rules treat virtually all communication about medical cannabis as advertising, including patient-to-patient discussions, leaving only direct healthcare practitioner-patient conversations as permissible. Sally King of the New Zealand Medical Cannabis Council called the rules a "chilling effect on patient informed consent," while Cannabis Clinic CEO Waseem Alzaher said doctors are now "afraid to talk about it" and clinics face punishment "for trying to educate people." MedSafe justified the restrictions by noting that medical cannabis products are "unapproved medicines" that haven't been assessed for effectiveness, requiring advertising controls. The extreme approach demonstrates how regulatory caution around medical cannabis can evolve into information suppression that potentially harms patient access and education. (Ganjapreneur)

🌾 Canada Updates Hemp Seed Standards to Allow Hybrid Certification

The Canadian Seed Growers' Association is rewriting industrial hemp rules to enable hybrid hemp seed certification and re-evaluate isolation distance requirements, marking the most significant overhaul of CSGA standards in decades. For over 20 years, Canada has only permitted open-pollinated hemp cultivars under certified seed programs, while hybrid hemp offers advantages like uniform crop structure, increased yields, and targeted cannabinoid profiles already available in U.S. markets. The changes come as Canadian hemp fields have stagnated, with growers seeking more precise crop development tools and breeding strategies to compete globally. CSGA is also reviewing isolation distances between hemp fields to prevent genetic contamination, particularly critical for high-purity CBD or CBG lines where cross-pollination can compromise product integrity. The reforms reflect hemp's evolution from niche crop to mainstream agriculture, with hybrid standardization potentially unlocking significant performance gains that other crops have achieved through controlled breeding programs. (Hemp Today)

🧾 Context: Twenty-five cannabis testing laboratories across ten states and Canada filed a collective $1 billion lawsuit against equipment manufacturer PerkinElmer/Revvity Health Sciences, alleging the company knowingly sold faulty testing gear under false promises starting in 2017-2018. The labs claim PerkinElmer marketed a "turnkey" cannabis testing suite that could meet state regulatory requirements but knew the equipment "could not, and was not designed to" accurately test cannabis. According to court documents, the company promised labs could run multiple required tests simultaneously and provided state-specific standard operating procedures that allegedly didn't exist, with some equipment so dangerous that "vessels would explode and cause harsh acid to be displaced in the lab." Several plaintiff labs lost state permits after failed testing attributed to the faulty equipment, including California's NCALC (The Higher Commitment) and Massachusetts-based Assured Testing, which is currently suing to recover its suspended license. (MJBizDaily)

🔎 What It Signals: The lawsuit exposes cannabis regulation's fundamental blind spot: states validate lab procedures and personnel while treating equipment as a black box, assuming commercial manufacturers provide functional tools. PerkinElmer's alleged fraud campaign during 2017-2018 exploited the rapid expansion of legal markets when testing labs faced enormous pressure to scale quickly without adequate equipment oversight. The geographic spread of affected labs across major cannabis markets signals that testing reliability issues may be industry-wide rather than isolated incidents, creating systemic risk where compromised equipment produces results that satisfy regulatory submissions while failing to detect actual contamination or measure accurate potency.