🗳️ Florida’s Audit War, GOP Hemp Split, and New York's Zombie Rules

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

Today’s edition is brought to you by Wispr Flow and Masterworks. We break down the DeSantis administration's unprecedented move to audit verified petitions, analyzing how the "Office of Election Crimes" is being weaponized to choke off the legalization initiative before a single vote is cast. From the open civil war fracturing the GOP over hemp to the surprise recriminalization campaign qualifying for the ballot in Massachusetts, we examine a week defined by structural friction. We also look at the "zombie" enforcement rules haunting New York retailers and a massive debt default in Michigan.

Also, be sure to check out the latest episode of The Hybrid for our 2026 bets and tripwires. No hot takes, which is a missed opportunity.

🗳️ Florida’s Executive Firewall
⚔️ The GOP Hemp Fracture
🧟 New York’s Zombie Rules

Enjoy your weekend.

📌 What Happened: Florida’s Office of Election Crimes and Security told elections supervisors in Orange, Hillsborough, and Pinellas counties that it will audit certain verified petitions tied to the 2026 adult-use marijuana initiative, with other counties potentially next. Gov. Ron DeSantis opposes legalization, and Smart and Safe Florida says the administration is using process directives and delays to keep the measure from qualifying. State officials point to more than 1,700 voter notices in the last three months alleging forged or misrepresented signatures, with roughly 675,000 petitions verified so far in the state database. The Division of Elections has issued multiple memos telling counties to unwind already-verified petitions or change how verification is handled, including a directive tied to petitions collected by 25 circulators whose registrations were revoked and a request to re-check signatures gathered while those circulators were still registered. Another flashpoint is a new-law notice requirement where the Division has asserted that “as soon as practicable” means same-day mailing and that notice must go out before a county reports a verified petition to the state. The campaign has until February 1st to reach roughly 880,000 verified signatures, and qualifying still sends the measure to Florida Supreme Court review.

💡 Why It Matters: This story boils down to volume-and-deadlines. The campaign’s path runs through county election offices that are already processing a heavy load under tight timelines. Audits of verified petitions and directives that require re-checking petitions add work late in the cycle, when there is not much room to absorb it. The forged-signature complaints are serious, and they supply the state’s public rationale for increased scrutiny. The practical question is how these added steps affect the pace of verification and reporting during the final stretch to the February 1st threshold.

🚜 Comer Fractures GOP Coalition with Hemp Ban Delay Bill

House Oversight Chairman James Comer (R-KY) escalated his challenge to GOP leadership yesterday, appearing alongside the U.S. Hemp Roundtable and farmer coalitions to unveil legislation delaying the federal hemp-derived THC ban for two years. By publicly flanking himself with the industry, Comer is forcing a visible wedge between the party’s agrarian wing and the social conservatives backing the strict "Miller Amendment." The proposed delay aims to bridge the market through the 2026 midterms and prevent what Comer describes as a "catastrophic" economic event for rural districts. This coordinated push signals that the House coalition is prepared to hold must-pass spending vehicles hostage to protect the gray market from the incoming prohibition. (Marijuana Moment)

🌾 McConnell Rebukes Delay Effort and Defends Total Hemp Ban

Senator Mitch McConnell publicly undercut Chairman Comer’s delay effort in a Courier Journal op-ed yesterday, signaling to the upper chamber that the prohibition on hemp-derived THC remains a non-negotiable red line. The senior Senator explicitly dismissed industry economic data as "distorted" and argued that Kentucky’s agricultural future cannot be built on a "loophole" for synthetic intoxicants regardless of short-term pain for growers. This intervention serves as a whip signal to Senate Republicans and effectively kills any hope that a House-passed delay could survive a voice vote in the upper chamber. For operators, the message is stark. Despite the noise in the House, the architect of the 2018 Farm Bill is fully committed to dismantling the intoxicating market he inadvertently created. (Courier Journal)

⚖️ Senate Holdouts Attempt to Veto Executive Rescheduling Authority

Senators Cynthia Lummis (R-WY) and Steve Daines (R-MT) introduced legislation yesterday to strip the Attorney General of final rescheduling authority in a procedural Hail Mary intended to derail the administration’s move to Schedule III. The bill would require affirmative congressional approval for any shift in drug classification, effectively handing the Senate a pocket veto over a process that has historically been the domain of the executive branch. While the legislation lacks the votes to override a veto, its introduction creates a dangerous leverage point for upcoming DOJ confirmation hearings where individual Senators can hold nominees hostage to extract enforcement concessions. The move confirms that the prohibitionist wing of the party has shifted tactics from regulatory arguments to raw obstruction. (Cannabis Business Times)

🏛️ House Appropriators Lock In DC Sales Ban for Another Year

The House passed the FY26 Financial Services and General Government appropriations bill yesterday, renewing the "Harris Rider" that legally bars Washington, D.C. from spending local tax dollars to regulate adult-use sales. Despite a push from Del. Eleanor Holmes Norton to strip the provision, GOP leadership retained the ban as a standard legacy rider to ensure the District’s chaotic "gifting" economy remains the only operating model for another fiscal cycle. Crucially, the rider’s specific statutory language targeting "tetrahydrocannabinols derivatives" creates a legal knot that may persist even if the federal government finalizes the move to Schedule III later this year. For compliant operators, this is the worst-case scenario. It maintains a federal blockade that leaves the market wide open for unregulated shops while licensed businesses remain frozen on the sidelines. (Marijuana Moment)

🛑 Attorney General Yost Rejects Repeal Petition as "Sloppy Work"

Ohio Attorney General Dave Yost blocked the initial petition to repeal Senate Bill 56 yesterday, ruling that the summary language regarding local tax powers and gift bans was "misleading" and unfit for the ballot. Yost’s rejection was notably sharp. He characterized the drafting as "sloppy work," a tonal signal that his office views the repeal effort as an amateur nuisance rather than a serious constitutional challenge. The decision forces the Ohioans for Cannabis Choice coalition to restart the signature-gathering clock, burning critical weeks as the November ballot deadline approaches. This procedural stiff-arm ensures that the stricter retail limits and hemp bans in the new law will remain the law of the land while the opposition remains stuck in administrative limbo. (WLWT)

🛡️ Massachusetts Repeal Effort Hits Immediate Legal Gauntlet

The certification of 78,000 signatures for a Massachusetts repeal measure has triggered an immediate legal counter-offensive from state trade groups rather than a panic over legislative action. While the initiative technically moves to the State House, the industry’s defense strategy centers on invalidating the petition in court by challenging the deceptiveness of the signature-gathering tactics. Industry attorneys are preparing to argue that the "Act to Restore a Sensible Marijuana Policy" relied on fraudulent interactions to secure support, a procedural attack designed to kill the measure before it can reach the November ballot. If this legal firewall fails, operators face the expensive prospect of mobilizing a statewide "No" campaign to defend a $1.6 billion market. The development forces incumbents to divert capital from expansion to survival to re-litigate a cultural consensus they believed was settled in 2016. (Boston Globe)

💰 CCC Leverages "Social Sites" for Budget Hike Amidst Agency Chaos

The Massachusetts Cannabis Control Commission (CCC) formally requested a significant budget increase yesterday to fund the rollout of social consumption, effectively daring the legislature to invest in an agency defined by its own internal drama. Commissioners argued that the new "social sites" license tier requires expanded oversight capacity, a pitch that lands awkwardly against a backdrop of infighting and their own peculiar behavior and antics. The request forces state budget makers to decide whether to underfund the next phase of market expansion or pour more capital into a regulator that has spent the last year consuming itself. If lawmakers balk at the price tag, the long-delayed cafe rollout becomes the latest casualty of the Commission's own dysfunction. (State House News Service)

⚖️ New York Retailers Allege Licensing Denials Tied to "Dead" Rule

A group of New York cannabis retailers filed suit yesterday alleging the Office of Cannabis Management (OCM) improperly denied their license applications by enforcing an "outdated" distance requirement that had already been repealed. The plaintiffs argue that OCM regulators rejected their applications based on proximity to other dispensaries using a 1,000-foot buffer rule that the Cannabis Control Board had previously voted to reduce or eliminate for specific zones. The lawsuit claims this "zombie enforcement" demonstrates a continued administrative breakdown within the agency, where processing staff appear to be adjudicating files based on obsolete guidance documents rather than current regulations. If the court sides with the retailers, it could force a re-evaluation of dozens of rejected licenses and further stall the state’s already sluggish retail rollout. (Law360)

🔔 Pennsylvania Lawmakers Pivot to Hemp Regulation

The Pennsylvania Senate Law and Justice Committee convened yesterday to evaluate a framework for taxing and regulating hemp-derived THC, explicitly steering the conversation away from a total ban. Industry representatives and public health officials debated the mechanics of age verification and testing standards, signaling a bipartisan appetite to bring the $400 million gray market under state oversight. The hearing contrasts sharply with the "ban-first" approach in other swing states to suggest Harrisburg views these products as a taxable revenue stream rather than a criminal nuisance. If this regulatory path holds, Pennsylvania could emerge as a critical fortress for the hemp sector against the encroaching federal prohibition. (WITF)

📋 South Carolina Weighs "Common Sense" Hemp Guardrails

South Carolina lawmakers are weighing new regulations for the state's expanding hemp market, aiming to impose age limits, testing standards, and clear packaging rules on intoxicating products. Unlike the blanket bans sweeping other southern states, this proposal seeks to preserve the commercial channel for compliant businesses while purging the "gas station" sector of untested synthetics. The move reflects a growing pragmatic consensus in some conservative legislatures: if you can't ban it, tax and test it. For operators, this offers a potential safe harbor in the South, provided they can meet the stricter compliance costs. (Stateline)

🍽️ Hospitality Trade Urges Pivot to Hemp Beverages

Restaurant Business advised operators yesterday to explore hemp-derived THC beverage programs, actively downplaying the risks of the looming federal ban in favor of immediate revenue. The trade journal’s pivot highlights the widening gap between Washington’s legislative timeline and the commercial reality on Main Street, where retailers like Target and convenience chains are already normalizing the category. While the recently passed federal prohibition threatens to close the channel by late 2026, the publication argues that the "opportunity" for margin-starved restaurants outweighs the statutory uncertainty. This endorsement from a standard-bearer of the hospitality industry signals that THC has fully crossed from "vice" to "menu item" for the business class, regardless of the crackdown in D.C. (Restaurant Business)

📉 Michigan Operator Defaults on Flagstar Debt

Tend.Harvest.Cultivate (formerly Fluresh) entered a "massive restructuring" process yesterday after defaulting on its commercial loans with Flagstar Bank. The Grand Rapids-based operator has failed to stabilize its balance sheet despite shuttering its $46 million Adrian cultivation facility in 2024 to stem operating losses. The default triggers a forced reorganization for one of the few cannabis companies with tier-one banking access, stripping management of autonomy as lenders dictate the next phase. This failure exposes the fragility of legacy operators who leveraged their balance sheets before Michigan’s price floor collapsed. (Crain's Detroit Business)