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October 31, 2025
Built by a former cannabis regulator, Policy, Decoded delivers high-signal analysis for operators, investors, and policymakers navigating regulated markets.
Our latest Decoded Insight was too spicy not to make our read-in today. Licensed cannabis operators are no longer hinting at frustration - they’re escalating into a coordinated pressure campaign. Within 48 hours, Missouri, Pennsylvania, and Kansas rolled out lab results, child-safety narratives, and targeted raids that frame hemp products as unregulated marijuana and public health risks. The timing isn’t coincidence. It’s a strategic show of force aimed squarely at Washington as Farm Bill and shutdown negotiations converge: “If intoxicating hemp sits outside the regulated system, chaos follows.”
But here’s the real risk: lawmakers may not draw fine distinctions between hemp and marijuana when the political heat rises. If the industry keeps fighting itself instead of building a credible shared framework, Congress won’t choose winners - it will pull the rug out from under both.
Today’s edition is sponsored by 1440 Media - smart context, delivered fast. Plus, Happy Halloween - and don’t miss today’s new episode of The Hybrid with LEVIA’s Kristin and Eric Rogers on building, selling, and reclaiming a brand.
🧪 Licensed cannabis turns lab data into a weapon
🏛️ Ohio Republicans split on voter-approved cannabis
🌾 Kentucky’s hemp fight becomes a federal showdown
Stay sharp. Stay informed. Check your candy.
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The deeper pattern behind today’s moves - and why it matters next.
🧾 Context: Three state-level enforcement actions against hemp-derived THC products landed within 48 hours of one another late this month, each using the same approach. The Missouri Cannabis Trade Association released testing results Tuesday showing 53 of 55 hemp products exceeded the 0.3 percent threshold, with one particular vape testing at 89.03 percent THC. In Pennsylvania's Montgomery County, a grand jury spent 10 months investigating smoke shops and released findings Wednesday showing that 135 of 144 products tested were "full-blown marijuana with THC levels of 5.0 percent and higher," with three suburban Philadelphia district attorneys presenting testimony about an 18-month-old toddler and a 9-year-old child who ended up hospitalized after THC exposure. Kansas ran raids earlier in the month on 18 hemp retailers after KBI warned beverage wholesalers last year that THC drinks were "prohibited by Kansas law," though KBI later clarified the raids mostly targeted marijuana flower and psilocybin, with beverages "not a major focus." The timing lines up with Sen. Mitch McConnell pushing Farm Bill language in Washington, D.C. that would ban hemp products with "quantifiable" amounts of THC, while his in-state colleague, Sen. Rand Paul warns that the ban would "completely destroy" Kentucky's hemp industry. This week, as Congress fights over government funding and a possible shutdown, both Kentucky senators are working their colleagues behind closed doors on opposing sides of language that would either eliminate or preserve the intoxicating hemp market.
🔎 What It Signals: Three states moving within 48 hours means things are reaching a national boiling point. Marijuana dispensaries are watching Instagram ads for THC seltzers and direct-to-consumer gummies, and it's easy to see why that pisses them off. You invested millions in compliance infrastructure to operate behind frosted windows and out of vaults under 24/7 surveillance while hemp companies advertise THC products on social media and ship direct to consumers. Cannabis trade associations in mature markets face identical pressure: margins shrinking, competition intensifying, and hemp retailers selling functionally identical products at Target. Missouri's 96% failure rate and Pennsylvania's 94% over-threshold rate are designed to sound damning, and they work because they generate headlines about "illegal marijuana" at gas stations.
Pennsylvania's approach is particularly sophisticated: three suburban Philadelphia DAs spent 10 months building a grand jury case with testimony from hospitalized children and a report titled "Unregulated, Unsafe and Illegal" that explicitly recommends channeling all THC products through state-regulated systems. It's advocacy wearing a law enforcement costume for Halloween, and it's effective. What licensed operators won't say publicly: hemp has proven, and is proving, mainstream distribution works. Cannabis beverage companies spent years arguing THC drinks could move through alcohol distribution safely. Hemp beverages just did it. They're on liquor store shelves next to the latest podcaster-endorsed seltzers, reaching customers who'd never enter a dispensary. The model works and the economics work because you're not building vaults or managing cash-only operations.
🧠 THC Group Take: Cannabis industry: that hemp company could be your ally, not your enemy. They're proving your products can go mainstream, which is what you've been fighting for. You spent a decade making the case for sensible supply-chain rules. They just did it. Learn from that instead of trying to eliminate them. Because here's the thing: if Congress bans intoxicating hemp now, what makes you think federal rescheduling or legalization will go any differently? Congress can't tell the difference between hemp and marijuana today anyway. You're showing them exactly which arguments work. Child hospitalizations, untested products, lack of age verification. Prohibitionists are watching how effectively those arguments move legislators against intoxicating cannabinoids, and they'll deploy them against you the moment it's convenient (looking at you Maine and Massachusetts ballot questions).
Hemp industry: Time to clean it up. You need to agree to regulatory standards, probably get taxed, and absolutely shed the gas station disasters making you all look bad. The 500mg gummies sold to teenagers, the untested vapes with heavy metals, the products with zero age verification at convenience stores are ammunition for people who want to shut down the entire intoxicating cannabinoid market. You got Congress to legalize hemp federally, which is more than cannabis has managed. Don't squander that by defending indefensible operators.
Here's what nobody wants to admit: responsible hemp beverage manufacturers with age-gating, lab testing, and 5mg servings proved mainstream distribution works fine. In fact, it competes toe to toe with the big guys. Gas stations selling unregulated products to minors proved zero oversight produces disasters. Both are true. The smarter play for both industries is potency-based regulations regardless of plant source. Testing standards, age verification, serving limits that separate responsible operators from the gas station bullshit. Mainstream retail for lower-potency products with guardrails, intensive oversight for volume and concentrates. You both want to keep pharmaceutical companies and alcohol conglomerates from capturing this market when federal intervention happens.
The recent coordinated state enforcement actions you’ll read about below tells me cannabis operators think they're winning an elimination strategy. You're probably creating conditions for federal intervention neither industry wants. 39 state attorneys general already wrote Congress demanding action, even though some are walking that back now. McConnell's ban language is gaining momentum, especially if it means the government reopens, while Rand Paul throws himself on the tracks. You might be fighting over who gets eliminated first when you should be figuring out how to survive together. One of you is currently legal federally. If you let Congress ban it now using the same arguments you're weaponizing, you're writing your own obituary. And nobody knows political mortality better these days than Mitch McConnell.
Fast-moving headlines, flagged for what matters.
Thirty-nine attorneys general just asked Congress to ban hemp-derived THC products, calling them synthetic drugs that exploit the 2018 Farm Bill. Sen. Mitch McConnell and Rep. Andy Harris are leading the crackdown effort, but Sen. Rand Paul is threatening to block any government funding bill that touches hemp, calling it a multi-billion dollar Kentucky industry that would be devastated. The hemp sector is now rapidly hiring lobbyists including former Kentucky Secretary of State Bob Babbage, Lobbyit, Crossroads Strategies, and Williams and Jensen to protect the regulatory gap that lets hemp THC products sell in states where cannabis remains illegal. Rand Paul's willingness to continue to shut down government funding over this puts enormous pressure on GOP leadership, and the fact that hemp groups are hiring Kentucky-specific lobbyists shows they understand this fight runs through McConnell's backyard. Every state watching its own hemp market develop should note that federal tolerance of the 2018 loophole is no longer guaranteed, and the leverage here sits with whoever blinks first on a shutdown threat. (Politico Influence)
Ohio's Senate voted 32-0 to reject House amendments to legislation that would strip voter-approved cannabis protections while regulating hemp, sending the measure to conference committee after senators from both parties complained the House version left loopholes for synthetic THC and failed to require testing or child-resistant packaging. The House substitute eliminated the most aggressive provisions from the original Senate bill but still removes anti-discrimination protections for lawful cannabis users in child custody and organ transplant cases, recriminalizes possession of out-of-state legal cannabis, and bans smoking on bar patios while capping adult-use flower at 35% THC. Senate Republicans focused their floor speeches on hemp beverage provisions that would allow bars and breweries to sell drinks with up to 10 mg THC for takeout, limit hemp dispensaries to 400 statewide with an August 30th grandfathering date, and impose only a 300-day grace period for unlicensed operators to shut down. House Speaker Matt Huffman admitted his caucus splits three ways between legalization supporters, hemp-cannabis parity advocates, and prohibitionists like himself who believe cannabis "should be rare." Ohio Republicans can't decide whether to honor or gut what 57% of voters approved in 2023, so the $3 billion market keeps operating under rules legislators openly despise while 4,000 hemp businesses wait to learn if conference committee produces anything before DeWine's enjoined emergency ban expires. (Marijuana Moment / Ohio Capital Journal)
Sheldon Coleman, from the famous cooler and camping family, is now running hemp beverage company AdvenTrue, and is challenging what he calls deliberately confusing KBI communications about THC-infused beverages after the agency sent an August letter warning wholesalers that such products are "prohibited by Kansas law" despite federal hemp legalization. Coleman claims the KBI conflates illegal marijuana-derived THC with legal hemp-derived THC and misapplies a statute governing vapes to beverages, while KBI Director Tony Mattivi publicly stated drinking one can equals smoking a joint when Coleman calculates it would take five cans to equal half a joint. Math, amiright? The KBI conducted raids in early October but targeted marijuana flower and psilocybin edibles rather than beverages, though Coleman says the August letter and selective enforcement have paralyzed legitimate retailers who no longer know what's legal. Coleman and the Kansas Beer Wholesalers Association hired attorneys to create what they call a "bullet-proof document" explaining beverage regulations and sent it to KBI in September without receiving a response. Kansas has virtually no regulations on THC beverages compared to alcohol, leaving an industry serving mostly middle-aged women seeking sleep aids operating in a legal gray zone where law enforcement statements can destroy businesses overnight without clear standards. (The Wichita Eagle)
The Missouri Cannabis Trade Association released testing results showing 53 of 55 hemp products purchased from smoke shops and gas stations exceeded the 0.3% THC threshold, with some vapes testing out at 89% THC, 296 times the legal limit, while 16 products failed for heavy metals, pesticides, or residual solvents. The trade group sent products to three licensed Missouri testing facilities and claims retailers are perpetuating a "gigantic hoax" by selling illegal cannabis as federally compliant hemp, with only two companies passing any tests. MoCannTrade Executive Director Andrew Mullins says the findings validate what the licensed industry has argued since 2021 and hopes the report pushes law enforcement and newly elected Attorney General Catherine Hanaway to crack down on unlicensed retailers. The timing aligns with ongoing legislative battles over hemp regulation, where the cannabis industry backs channeling all intoxicating products through dispensaries while the hemp industry proposes a separate regulatory structure that state agencies estimate would cost up to $95 million annually to administer. The report is a competitive weapon disguised as consumer protection: licensed operators who pay millions in compliance costs want hemp competitors eliminated or forced into the same expensive regulatory framework, though nobody disputes that untested products with 500 mg THC candies sold to minors at gas stations are a genuine public safety disaster. (MJBizDaily / The Pitch KC)
A 10-month Montgomery County grand jury investigation found that 135 of 144 THC product samples purchased from Pennsylvania smoke shops tested above the 0.3% legal threshold, with prosecutors from Montgomery, Bucks, and Chester counties calling the results evidence retailers knowingly violate state law. District Attorney Kevin Steele released findings showing four samples met legal limits while four contained no THC despite packaging claims, as the grand jury heard testimony about an 18-month-old Norristown toddler hospitalized after finding a vape pen and a 16-year-old experiencing cardiac distress from a gummy bought at school. The report recommends eight reforms including mandatory 21-and-over age limits with electronic ID scanning, statewide licensing systems similar to alcohol, batch testing requirements, and civil liability for sellers who harm consumers or mislead the public. The grand jury framing is strategic prosecution theater: three suburban Philadelphia DAs coordinate a 10-month investigation producing statistically alarming test results timed for maximum legislative pressure. Pennsylvania lawmakers will read "94 percent illegal" and "toddler hospitalized" as mandate for crackdown rather than recognizing this describes the predictable outcome when legal hemp flower gets you high and nobody regulates potency, packaging, or age verification because the legislature has spent seven years paralyzed over medical cannabis expansion while smoke shops filled the vacuum. (North Penn Now)
DEA is promoting a multi-million dollar ad campaign from Make America Fentanyl Free, a Trump-affiliated nonprofit, including spots that depict lit joints and claim fentanyl-laced cannabis causes overdose deaths. The campaign received direct input from Trump, who pushed for visceral imagery, and features former Trump campaign advisors Chris LaCivita and Danielle Alvarez. One ad shows actors describing deaths from supposed fentanyl-contaminated weed at a birthday party. New York regulators called the fentanyl-laced cannabis narrative "false" and a "widespread misconception" in 2023, noting law enforcement claims about contaminated flower are routinely walked back after additional testing. The DEA promotion comes through the same Get Smart About Drugs site the agency uses to link cannabis to depression and suicide, even as another Trump-affiliated PAC is simultaneously running ads pushing the president to reschedule marijuana. (Marijuana Moment)
Six gun rights organizations just asked the Supreme Court to combine two cannabis-and-firearms cases instead of deciding the issue based solely on U.S. v. Hemani, which involves a defendant allegedly tied to Iran's Revolutionary Guard who had multiple illegal drugs beyond marijuana. The groups argue Harris is far more representative of millions of Americans who use state-legal cannabis and face losing 2nd Amendment rights, and that deciding Hemani alone would settle constitutional questions based on highly unusual facts. Their brief drives at the core historical analogy question: founding-era laws banned drunk people from carrying guns, not anyone who kept alcohol at home. The statute treats cannabis users like it would treat anyone with a six-pack in their refrigerator, prohibiting gun ownership entirely rather than just while intoxicated. DOJ has consistently defended the ban by comparing marijuana users to mentally ill people, and many suspect the government pushed for Hemani specifically because the multiple drugs and national security implications play in their favor. Every state with medical cannabis programs should watch this closely, as a Supreme Court ruling upholding the ban would validate federal warnings like Kentucky's recent notice that medical marijuana patients must divest themselves of firearms. (Marijuana Moment)
The Michigan Cannabis Industry Association filed a lawsuit minutes after Governor Gretchen Whitmer signed a 24% wholesale tax into law, arguing it unconstitutionally amends the 2018 voter-approved legalization initiative without the required three-quarters legislative supermajority. The tax passed 78-21 in the House and just 19-17 in the Senate, well short of the threshold needed to modify citizen initiatives, and adds to Michigan's existing 10% retail excise tax and 6% sales tax to create what operators calculate as a 51% total tax burden when compounding effects are included. The association is seeking a preliminary injunction to block the January 1st enforcement date, alleging the legislature misleadingly renamed the bill from a road funding mechanism to a wholesale tax at the last minute and violated contract protections by taxing negotiated volume discounts between growers and retailers. Whitmer claims confidence the tax will be upheld despite dedicating $420 million of her $1.8 billion road funding plan to cannabis revenue while leaving the 4 percent liquor tax untouched. The constitutional argument is clean: Michigan voters approved a specific excise tax structure in 2018, and if legislators want to add another excise tax on cannabis under any name, they need 104 votes in the 138-member legislature, not the 97 they got. (Crain's Detroit Business)
Thirteen Massachusetts retail cannabis licenses were surrendered, revoked, or not renewed in fiscal year 2025, exceeding the nine total retail surrenders across the previous seven years since the industry launched in 2018. The surrender rate for retail licenses jumped from 2.4 percent at the end of fiscal 2024 to 5.4 percent by June 2025, while total license surrenders across all categories reached 34 in fiscal 2025 alone compared to 37 cumulative surrenders through fiscal 2024. The Cannabis Control Commission reports 766 businesses have been approved to commence operations as of October, representing nearly 10 percent growth year-over-year even as the industry surpassed $8 billion in adult-use sales in July. Cultivator Bountiful Farms acquired two struggling dispensaries this fall to enter retail for the first time, exemplifying consolidation as falling prices and oversupply force smaller operators out while larger players expand into vacated markets. The 5.4 percent retail surrender rate understates the crisis facing Massachusetts operators: this counts licenses surrendered, not businesses closed, meaning multi-license holders shuttering locations don't appear in these figures, and the industry crossed into double-digit total license surrender rates at 9.4 percent just as the state debates whether a repeal initiative will make the 2026 ballot to eliminate the $1.6 billion market entirely. (Boston Business Journal)
Former LePage administration officials and GOP state Senator Scott Cyrway filed a ballot initiative to repeal Maine's adult-use retail market almost ten years after voters approved legalization, eliminating commercial cultivation, manufacturing, and sales while stripping consumers of home cultivation rights. The petition would keep possession of up to 2.5 ounces legal and preserve the medical program, though petitioners are already requesting language changes from the state revisor's office before signature gathering begins. The Maine effort joins a Massachusetts campaign that claims to be "on track" to collect 100,000 signatures by December 3rd to repeal that state's $1.6 billion adult-use market, marking the first coordinated attempts to roll back legalization through direct democracy. Representative David Boyer defended the adult-use market he claims he built in 2016, conveniently ignoring that he's spent the past two years blocking medical cannabis testing requirements, taking campaign cash from untested cultivators, and crusading against the state cannabis director for alleged conflicts while his own donors include the very operators profiting from Maine's regulatory black hole. (Marijuana Moment)
From the hearing room to the comment section — we’re watching it all.
🎃 The annual Halloween cannabis candy panic resurfaces despite zero documented cases of anyone distributing expensive, regulated edibles to trick-or-treaters. New York's Office of Cannabis Management helpfully reminded parents not to hide weed where they hide birthday presents, addressing the imagined threat of malicious strangers while tacitly acknowledging the actual risk is your own poorly secured stash. (The Fresh Toast, WBNG)
⚠️ Signature drives in Maine and Massachusetts aim to repeal adult-use cannabis laws through 2026 ballot initiatives, marking the first serious attempt to roll back legalization via direct democracy. Dentons partners Joanne Caceres and Hannah King warn the industry is ignoring a potential contagion risk: a single repeal victory would signal to institutional investors that legalization is politically reversible, chilling capital across all markets regardless of geography. (Marijuana Moment)