In partnership with
January 2, 2026
Built by a former cannabis regulator, Policy, Decoded helps operators read the policy terrain before it shifts beneath their feet.
New York just crossed $2.5 billion in adult-use sales, and 2026 will be defined by whether Albany and New York City can deliver steady rules, credible enforcement, and a program that stops changing midstream. Washington is not getting quieter either. Smart Approaches to Marijuana just hired Bill Barr to tee up litigation against Schedule III, and the 280E reality remains simple: nothing changes until a final rule is published with an effective date that survives the first court sprint.
Today’s edition is supported by The Rundown AI and 1440 Media. To sponsor Policy, Decoded and reach the executives, investors, and policymakers who read this briefing, reply to this email and we will send details.
🗽 New York stability test
⚖️ Schedule III lawsuit posture
🌾 Hemp lane tightening
Go enjoy the weekend.
Learn AI in 5 minutes a day
This is the easiest way for a busy person wanting to learn AI in as little time as possible:
Sign up for The Rundown AI newsletter
They send you 5-minute email updates on the latest AI news and how to use it
You learn how to become 2x more productive by leveraging AI
Start here — the day’s most important development, decoded for impact.
📌 What Happened: New York’s legal adult-use market has crossed $2.5 billion in sales, and the state reports 519 adult-use dispensaries open as of November 30, 2025. Legal access now reaches more of the state and more everyday consumers. OCM is still working through the school proximity reset, including a court-backed door-to-door approach that runs through February 15th. New York City has leaned hard into its padlock campaign and is citing large closure and seizure numbers, while judges and defense lawyers keep testing the boundaries of process. Albany also made cannabis leadership changes heading into the new year, a signal that credibility and execution are being measured closely.
💡 Why It Matters: New York has the ingredients of an East Coast powerhouse. Tourism and density create reliable demand, and the state’s geographic diversity creates real opportunity across cultivation, manufacturing, and distribution. Predictability is the make-or-break condition, because capital and serious operators move faster when rules stay stable and decisions are consistent. Proximity policy has already shown how a technical standard can become a real estate and financing issue overnight. Illicit retail still shapes the street price and the consumer habit, which makes enforcement strategy a market structure decision, not a press moment. Coordination between the state and cities and towns will decide whether this becomes one coherent system, especially with a new administration in New York City.
🧠 THC Group Take: New York has proven demand. The next phase is execution that feels predictable enough for serious capital, serious operators, and serious local governments to treat the program as permanent. Clear written standards, stable interpretations, and a licensing and enforcement cadence people can plan around will do more for this market than another round of press.
The proximity mess can become a turning point if the state uses it as the forcing function to land one durable measurement rule and stick with it. That means one standard, one plain-English explanation, one set of internal decision notes, and consistent application across regions. Every week that standard stays steady reduces legal spend, reduces financing friction, and lets cities and towns stop litigating tape measures and start making real land use and public safety choices.
Enforcement needs the same discipline. Closing illegal shops matters, and it has to be done with cases that hold up in court and look fair to the public. A crackdown that keeps getting reversed becomes background noise. A crackdown that is consistent changes behavior fast, because consumers follow convenience and price.
New York also needs a clear-eyed production strategy. The state has real agricultural capacity and a cultivation story that will keep growing, and overbuilding that footprint carries risk if interstate commerce arrives and national supply shifts toward lower-cost climates like Arizona and California. New York’s durable advantage sits in brand-building: a massive consumer base, constant travel and tourism, and a retail and manufacturing environment where national brands can be born and stress-tested at scale.
Alignment is the ultimate hinge, though. When the governor’s office, OCM, and New York City share priorities and move in the same direction, the legal market gains speed and legitimacy. New York wins when the program starts feeling boring: clear rules, repeatable decisions, and enforcement that holds up, creating the stability that turns a big market into a national platform.
Fast-moving headlines, flagged for what matters.
Smart Approaches to Marijuana says it has retained former Trump Attorney General Bill Barr to sue if DOJ finalizes a Schedule III rule. Hiring Trump’s former attorney general to fight Trump’s policy has a certain Washington elegance, especially given how publicly that relationship soured. The move reads like an attempt to buy credibility in the courtroom and in the press at the same time. The substance still matters because this signals a fast litigation sprint aimed at the effective date, with 280E relief sitting near the center of the attack. If DOJ moves, expect the lawsuit to land quickly and try to slow the clock before the tax consequences ever reach financial statements. (Marijuana Moment)
Rescheduling talk keeps drifting into tax wishful thinking, and MJBizDaily is pushing back. Cannabis stays Schedule I until DOJ completes the rulemaking and publishes a final rule with an effective date. Even then, effective dates vary, and IRS posture tends to follow the code and formal guidance, not headlines. Plan 2025 as a full 280E year, and treat aggressive amended returns as a deliberate dispute strategy, not routine cleanup. The first real operational shift will be CFO behavior, because boards do not budget on hope. (MJBizDaily)
USDA is holding its line: OneRD borrowers cannot rely on revenue tied to marijuana activity, even when the underlying business is lawful under state programs. The restriction reaches common structures like rent from a dispensary tenant and certain contracts connected to a dispensary site. The risk here is timing, since these issues often surface late in diligence after pricing, design, and partners are already set. Federal illegality remains the agency’s anchor, so there is no case-by-case sympathy built into the rule. Expect more rural projects to redraw tenant maps or lose federal backing at the finish line. (Marijuana Moment)
House Oversight’s autopen inquiry is creating fresh uncertainty around Biden-era marijuana possession pardons, with Rep. Nadler arguing the effort is being shaped to undermine them. The legal theory lives in process, not substance, which is exactly why it is dangerous in Washington. Even without an explicit committee target, the framework invites litigation-minded actors to test whether clemency can be re-litigated through paperwork disputes. That lands on real people who relied on pardons for jobs, housing, and licensing. It is a reminder that reform that depends on executive paper can still get dragged back into politics. (Marijuana Moment)
Idaho lawmakers are dismissing President Trump’s December 18th executive order pointing toward Schedule III, arguing the state can keep marijuana fully illegal regardless of federal scheduling. Leaders describe conformity as a yearly legislative choice informed by the Board of Pharmacy, so Washington’s posture does not bind Boise. The bigger fight is pointed at November 2026, when voters will see a proposed constitutional amendment designed to reserve legalization decisions to the Legislature rather than ballot initiatives. That amendment could collide with a medical marijuana initiative if supporters meet Idaho’s signature and district distribution thresholds. The state is setting up a procedural showdown that delays any serious policy debate and keeps patients and law enforcement stuck in limbo. (Idaho Statesman)
California hemp producers are making acreage and contract calls with a new federal clock running toward November. The revised definition moves testing toward a total THC framework that captures THCA, and it pairs that with a finished-product ceiling that threatens a wide slice of today’s extract-driven commerce. Growers producing legitimate inputs see the logic in shutting down intoxication sold through slapdash retail, and they also know trace THC is a predictable byproduct in full-spectrum supply chains. This is procurement risk disguised as policy, since inventory and biomass that clear today can become stranded on a fixed date. The smart money will tighten documentation now, not in late 2026 when everyone is scrambling at once. (Sierra Booster)
A NuggMD poll reported by Marijuana Moment finds broad opposition among cannabis consumers in legal states to recriminalizing hemp-derived THC products. The politics are not about defending gas-station chaos. The politics are about whether Congress writes a line that preserves disciplined, age-gated low-dose models and protects full-spectrum CBD access while cutting off synthetic-heavy, youth-facing channels. Public sentiment like this gives lawmakers room to negotiate dosage, packaging, and retail controls instead of defaulting to prohibition language. The next draft will be won in the details, not the press releases. (Marijuana Moment)
Rhode Island’s Cannabis Control Commission is on the clock to deliver recommendations by March 1, 2026 on dosage, packaging, labeling, licensing, and safeguards for hemp THC beverages. DBR already forced discipline into the category with a 1 mg total THC serving standard, a 5 mg per package cap for many edible formats, and resealable packaging expectations that make casual shelf games harder to pull off. Rhode Island is small, tourism-driven, and hospitality-heavy, which makes it a rare place where an age-gated beverage lane can be built with consistent enforcement and responsible service norms. A durable framework can reward brands that treat low-dose drinks like an adult product category and punish the convenience-store improvisers that keep triggering backlash. If Rhode Island gets this right, other Northeast states will borrow the structure quickly. (Providence Business Journal)
Alabama’s consumable hemp rules took effect yesterday, pushing gummies and drinks into a licensing and enforcement structure that resembles alcohol control more than general retail. The law caps most products at 10 mg THC per serving and 40 mg per package, backed by ABC-facing testing and label approval. Retailers now inherit a real compliance stack, including licensing, sourcing discipline, and a 10% excise tax at the register. Enforcement is built to bite, with seizure authority and criminal exposure framed around youth access and candy lookalikes. The market resets fast in states that move hemp into an ABC posture, and the winners are the businesses that can prove chain-of-custody without blinking. (WAFF 48)
Hawaiʻi is switching on a statewide registration requirement for manufactured hemp product retailers and distributors, including online and out-of-state sellers shipping into the islands. The registry is paired with inspection posture and product removal authority aimed at formats that do not fit Hawaiʻi’s narrow allowable categories. Registration is cheap on paper, and the surrounding expectations are not, because documentation and product type compliance are the real test. The immediate effect is a shrinking lane for casual tourist-market sellers and a cleaner advantage for businesses that can show sourcing, labeling, and lawful product types at the counter. Expect voluntary compliance through the grace period, followed by selective enforcement that makes examples out of the obvious violators. (Pacific Business News)
Michigan’s new 24% wholesale cannabis tax also took effect yesterday, hitting transfers into the retail channel before a consumer ever sees the receipt. The tax stacks on top of the 10% adult-use excise tax and the 6 percent sales tax, tightening margins in a market that already competes on price. Industry groups are fighting it in court, and the state is tying the revenue to road funding, which gives the policy a populist backbone. Retailers and brands now have to decide who eats the cost, since passing it through risks demand and absorbing it risks payroll. The cleanest outcome for consumers is unlikely, and the illicit market benefits from every pricing shock the legal system imposes on itself. (CBS News Detroit)
Curaleaf’s senior secured notes due December 15, 2026 have moved into the one-year horizon that can change how the obligation is presented in year-end reporting if refinancing is not locked down. The company reported roughly $456.8 million outstanding as of September 30, with cash around $107.5 million. Management has signaled refinancing intent and has taken steps that point toward that outcome, including facility moves tied to the 2026 maturity. This becomes a credibility test with lenders and investors because the window compresses quickly once a maturity is viewed as current. A smooth refinance preserves flexibility, and an expensive refinance writes the strategy for the year. (New Cannabis Ventures)
Glass House Brands and affiliated entities agreed to a $305,000 settlement tied to cultivation workers alleging missed meal and rest breaks, unpaid overtime, and off-the-clock work tied to aggressive production quotas. The case narrowed when class claims were dismissed without prejudice while PAGA claims stayed alive. The number is not the headline here. The headline is the familiar pattern where throughput becomes the culture, supervisors treat timekeeping as optional, and wage-and-hour exposure follows the harvest schedule. High-output cultivation shops need break discipline, clean records, and supervision that survives a subpoena, not just an inspection. (Lawyers and Settlements)
Alabama lawmakers filed legislation to make smoking or vaping marijuana in a vehicle with a child present a Class A misdemeanor, whether the car is moving or parked. The bill also requires an in-person education course and directs law enforcement to report violations to child welfare officials. It goes further by telling mandatory reporters to file a report when a child smells of marijuana, treating odor as suspected abuse or neglect. The child-protection intent is clear, and odor-based triggers are subjective and hard to apply consistently across marijuana, hemp, and residual smell. If it advances, families will feel the consequences before courts have time to clarify where discretion ends. (ABC 33/40)
A randomized trial in a bar-like lab setting found participants who used THC cannabis drank less alcohol over the next two hours than participants who used placebo. The effect showed up across potency conditions in the study, and participants also delayed when they started drinking once alcohol was available. The result fits the substitution narrative that shows up in public health and in culture. Regulators still have to manage the separate risks of impairment, youth exposure, and products marketed like candy, because substitution does not erase safety obligations. If this line of research holds up, it strengthens the case for rules that reward low-dose discipline and punish high-dose shortcuts. (Technology.org)
Fact-based news without bias awaits. Make 1440 your choice today.
Overwhelmed by biased news? Cut through the clutter and get straight facts with your daily 1440 digest. From politics to sports, join millions who start their day informed.
From the hearing room to the comment section — we’re watching it all.
🧪 Third-party audits keep getting treated like a luxury in cannabis and hemp manufacturing, even though they are one of the few tools that reliably surfaces the blind spots internal teams miss. As states tighten inspection posture and buyers, insurers, and investors demand proof of consistent quality systems, an external audit can convert “we think we’re fine” into a documented record that survives the next visit and the next deal. (Cannabis Science and Technology)
🏚️ The collapse of Humboldt’s cannabis economy is showing up in places nobody used to associate with weed at all, including Scotia, the last company town in California, now being sold off house by house after Pacific Lumber’s fall. The story reads as a regional reset: timber wars ended, the green rush faded, and local planners are left trying to rebuild a real economy around housing, infrastructure, and ordinary jobs. In a state built on boom cycles, this is what the downcycle looks like when it reaches Main Street. (Los Angeles Times)