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October 7, 2025
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.
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The hemp industry is appealing directly to President Trump as Congress advances spending bills that would outlaw nearly all consumable hemp products. The Veterans of Foreign Wars signed a national partnership to sell hemp-derived beverages at posts across 27 states, showing how mainstream the category has become even as lawmakers try to ban it. Alcohol distributors are maneuvering for control, California’s new hemp framework is squeezing both industries into the same failing system, and investors are chasing every hint of federal action while policy remains gridlocked.
🏛️ Hemp appeals to Trump
🍺 Veterans strike a hemp deal
📈 Markets react to rumors
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Start here — the day’s most important development, decoded for impact.
📌 What Happened: The US Hemp Roundtable is urging President Trump to intervene against appropriations language that would ban hemp products containing any quantifiable amount of THC, effectively eliminating over 90% of the current market including legitimate beverage operations. Both House and Senate committees have advanced spending bills redefining hemp to exclude consumable cannabinoid products, with bipartisan support from Mitch McConnell and Jeff Merkley in the Senate and Rep. Andy Harris leading the House effort. The Senate version includes a one-year delay on implementation that McConnell and Merkley negotiated, creating space for refinement though the baseline prohibition remains intact. Trump signed the 2018 Farm Bill that created the legal framework these companies operate under, and the industry is betting he'll oppose restrictions that would devastate businesses built on federal authorization. The language would maintain legal status only for industrial hemp grown for fiber, grain, oil, and non-cannabinoid products, eliminating regulated beverage companies alongside gas station products.
💡 Why It Matters: McConnell is rushing to close what he calls the hemp loophole before his retirement, but the proposed fix treats state-regulated beverage companies with age-gating and lab testing the same as unregulated THCA flower sold next to windshield washer fluid. The 2018 Farm Bill's failure to account for THCA created a regulatory gap that spawned both legitimate beverage innovation and chaos, but Congress spent seven years ignoring calls for federal guidelines while states built their own frameworks. Both industries now face the consequences of that federal vacuum, with legitimate hemp operators facing elimination because lawmakers see no distinction between responsible beverage companies and convenience store head shops. The one-year implementation delay creates time for refinement, but only if hemp and cannabis operators recognize they share common interests in sensible cannabinoid regulation rather than fighting over market share while alcohol distributors and pharmaceutical companies watch them destroy each other.
🧠 THC Group Take: This felt inevitable, honestly. Federal agencies refused to regulate hemp for seven years while two industries treated each other as enemies instead of recognizing their shared need for coherent cannabinoid policy. State-regulated hemp beverage companies that impose strict age verification, lab testing, and responsible serving sizes shouldn't be swept into the same ban as THCA flower operations, but the hemp industry's years of defending every product under the umbrella made that distinction politically impossible for Congress to see. Cannabis operators cheering the hemp ban should recognize that eliminating a legal substitute just sends those consumers back to alcohol or leaves them in the illicit market rather than converting them to state-licensed dispensaries, because consumers don't care whether their THC came from hemp or marijuana as long as it's safe and accessible. The real winners from this congressional action are alcohol distributors who successfully lobbied to eliminate a competitive threat while both cannabis and hemp operators fought each other instead of building a unified position on adult intoxicant regulation. The one-year delay is everyone's last chance to stop treating this as hemp versus cannabis and start advocating for frameworks that protect consumers, allow legitimate businesses to operate, and eliminate dangerous products regardless of which plant they came from.
Fast-moving headlines, flagged for what matters.
Massachusetts has generated nearly $2 billion in state and local cannabis revenue since legalization in 2016, with adult-use sales reaching $8 billion total through August 2025 and the market on track for another record year. The Mass Budget and Policy Center analysis shows the market took three years to hit $1 billion in sales, then accelerated to $7 billion more in just six years as licensing paced alongside regulatory capacity rather than flooding the zone with approvals before the agency could handle oversight. Government collects roughly 25 cents per dollar of sales through combined excise, sales, and local option taxes while keeping pricing competitive enough to prevent illicit market resurgence, with the Marijuana Regulation Fund dedicating revenue to public health, equity programs, and regulatory operations. The Cannabis Social Equity Fund, created in 2022, has distributed $28.9 million in grants after advocates pushed for dedicated resources and automatic allocation, though the Commission's overall budget remains subject to legislative appropriation and has plateaued despite social consumption licenses finally moving forward and expanding the agency's regulatory workload. (Mass Budget and Policy Center)
New York posted $214.4 million in legal cannabis sales in August, a new monthly record that brings year-to-date sales to $1.26 billion and puts the market on track for $1.8 billion by year end with $2.3 billion in total sales since launch. The state's 497 licensed dispensaries averaged $506,000 in sales per store in August, the third consecutive month of increasing per-store averages after competition drove numbers down earlier this year. OCM data shows the state has licensed enough cultivation capacity to produce 1.19 million pounds annually but actual 2025 production will hit only 474,000 pounds because most growers aren't using their full allotment, projecting a 40% supply shortfall for 2026 despite having licensed 51% more capacity than needed. There are a lot of reasons this would happen, especially given the starts and stops of New York’s rollout. The good news, though? 41% of inactive cultivators are planning to start operations before year end, although they’re likely facing the same financing barriers that have kept them offline while retail expansion continues. (Crain's New York Business)
The Veterans of Foreign Wars struck a deal with Florida-based Torch Drinks to sell hemp-derived Delta-9 THC beverages at posts in 27 states, with proceeds supporting veterans facing financial hardship. The partnership gives Torch access to VFW's 1.4 million members and lends institutional credibility to hemp beverages at a moment when Congress is attempting to ban the entire category through appropriations riders. VFW National Commander Carol Whitmore framed the deal as exploring ways to meet an evolving veterans community's needs, coming one week after Trump touted CBD benefits for seniors on Truth Social. The timing matters because veterans remain unable to access cannabis through VA healthcare despite state legalization, and the VFW endorsement of hemp-derived products creates political pressure on federal restrictions while the organization's federally chartered status tests how far hemp's legal ambiguity can stretch before enforcement. (New York Post)
California's new law bans raw hemp extracts in foods and beverages starting in 2026 and requires zero detectable THC, a standard that only pharmaceutical-grade CBD isolate can meet while eliminating full-spectrum products that need half the dose to achieve the same effect. The law forces hemp products into California's cannabis regulatory system where they'll compete with state-licensed cultivators already facing oversupply, while cutting hemp CBD access from 50,000 retail locations down to roughly 900 dispensaries. Hemp operators like Farmtiva's Chris Boucher say the California Department of Public Health can't clearly define what counts as "traceable" THC and the Industrial Hemp Enrollment & Oversight system remains disorganized, leaving manufacturers navigating contradictory guidance. The framework treats hemp and cannabis as interchangeable when they serve different markets and consumer needs, satisfying neither industry while creating regulatory chaos that other states will likely study before imposing their own restrictions on hemp products. (Hemp Today)
CrescentCanna's customer survey shows three-quarters of THC beverage consumers cut their alcohol intake, with one in five quitting entirely. The Distilled Spirits Council just welcomed its first cannabis beverage member, a move that signals distributors recognizing category substitution rather than fighting it. The 35-54 demographic dominates adoption at 53%, meaning these aren't experimental younger consumers but established drinkers with disposable income switching categories. States collect billions in alcohol excise taxes while watching consumers migrate to a federally illegal product category that most jurisdictions either don't tax or tax inconsistently. The substitution is happening whether regulators acknowledge it or not, and smart alcohol operators are positioning for distribution infrastructure advantages when federal prohibition eventually cracks. (Marijuana Moment)
MSOS and similar cannabis ETFs posted 70%+ quarterly gains after the president’s Truth Social account highlighted CBD benefits for older adults and Trump repeated his interest in rescheduling marijuana. Markets are treating social media posts as policy signals despite zero concrete movement on the rescheduling rule that's been formally stalled since May 2024. The rally conflates two unrelated issues: CBD derived from legal hemp requires no federal action, while THC-based cannabis companies need rescheduling to eliminate 280E tax burdens and access capital markets. This is the third major speculation rally since Trump's election, each driven by vague administration statements that never materialized into actual policy movement, and each followed by corrections when investors realized social media enthusiasm doesn't navigate OMB review processes or force DEA action. The pattern reinforces the reality of this administration: market volatility follows presidential social media habits, not regulatory timelines, and operators betting capital deployment on Truth Social posts rather than Federal Register publications are gambling on rumors from a guy who knows Dr. Oz and Mike Tyson instead of understanding how federal rulemaking actually works. (Funds Society)
Germany reclassified medical cannabis as non-narcotic in April 2024, but DocCheck's survey of 500 physicians shows 28% of general practitioners have never prescribed it despite legal access. Patients report two-thirds of doctors have poor cannabis knowledge, and only 13% who requested cannabis therapy from their physician actually received prescriptions. Instead, 56% were prescribed opioids like fentanyl even though 90% of cannabis patients reduced or eliminated other medications entirely. The gap drove 1,700% growth in self-pay telemedicine patients between March 2024 and September 2025, with flower now under 6 euros per gram for private payers. Germany's Federal Ministry of Health responded by proposing restrictions on telemedicine and delivery rather than addressing physician education, revealing how regulatory liberalization without provider training just shifts patients to private markets that insurance systems can't track or tax. (Cannabis Business Times)
From the hearing room to the comment section — we’re watching it all.
⚖️ New York's Cannabis Control Board just shot down municipalities inventing proximity restrictions that don't exist in state law, telling local officials their concerns about parks and pedestrian plazas mean nothing when the Cannabis Law never set those limits. Municipalities tried blocking dispensaries with fake "youth facility" protections despite New York City never passing the local laws required to create them, a move that backfired when CCB advisory opinions made clear the gap between what localities want to regulate and what the MRTA actually lets them do. Thanks to Michael McQueeny at Foley Hoag for the analysis. (Michael McQueeny, Foley Hoag)
🌲 Emerald Triangle cultivators are finally monetizing decades of breeding expertise through out-of-state partnerships, with legacy operators like Rebel Grown licensing genetics to Ohio's Anthos Organics and Ridgeline Farms collaborating with Cookies across multiple states. The deals let craft cultivators who preserved cannabis genetics through prohibition reach national audiences while maintaining their California operations, creating revenue streams beyond the state's challenging wholesale market. What makes these partnerships work is shared cultivation values: Anthos uses living soil beds that mirror Emerald Triangle regenerative practices, ensuring the genetics express similarly in new markets and preserving the craft cultivation knowledge that California's legacy farmers spent generations developing. (GreenState)
🕊️ New York dispensary The Travel Agency ran a pilot program using carrier pigeons in mini-backpacks to deliver cannabis across the city, with plans to launch the service in 2026 using trained birds that can carry up to one gram per flight. The stunt works as marketing because it highlights an actual regulatory gap: New York's Cannabis Law doesn't explicitly address avian delivery methods, meaning there's technically no prohibition against using pigeons to bypass traffic congestion for same-day service across three boroughs. (Cannabis Business Times)
🎬 Detroit filmmaker Mary Pryor's documentary Kiss My Grass exposes how Black women represent less than 2% of cannabis business ownership despite being disproportionately harmed by prohibition, with the 23-minute film shot on just $150,000 after its original $1.5 million budget collapsed. Pryor deliberately avoided stereotypes and trauma exploitation while centering Black women's voices on wealth inequality, with never-married Black women owning just eight cents for every dollar owned by never-married white men according to data the film highlights. Executive produced by Rosario Dawson and Colin Kaepernick with narration by Dawson, the documentary premieres on streaming this winter after its Tribeca Film Festival debut. (Gander Newsroom)