September 30, 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.
Today’s edition is brought to you by THC Group and The Hybrid podcast. The new episode features Carl Giannone, co-founder of Trade Roots, on the challenges of operating in Massachusetts and what comes next.
Vertanical’s clinical trial results put a cannabis extract on track for European approval, creating a pharmaceutical benchmark U.S. operators cannot ignore. Michigan’s Senate votes this week on a 24% wholesale tax as flower prices bottom out. San Francisco’s equity buyout shows how exit clauses hollow out hard-won policy gains.
💊 Pharma cannabis enters the clinic
🚨 Michigan’s looming tax cliff
🏙️ Equity exits reshape policy promises
Start the day informed. Stay ahead.
Start here — the day’s most important development, decoded for impact.
📌 What Happened: Vertanical released results in Nature showing its cannabis extract reduced chronic low back pain in more than 800 patients, with better dropout rates than opioids and no signs of addiction or withdrawal. Regulators in Germany and Austria are reviewing the data, with decisions expected in July, and the company claims to be working “closely” with the FDA on a potential U.S. pathway. The six-month trial extension showed durable benefits, reinforcing the case for a first-in-class, non-addictive pain therapy. Side effects were limited to dizziness and mild nausea early in treatment. The filings put Europe on track to approve a cannabis-derived pharmaceutical for mainstream pain management before the U.S. takes its first real step.
💡 Why It Matters: A green light in Germany or Austria would make Vertanical’s extract one of the first cannabis-based medicines to compete directly with opioids in an insured healthcare system. That would set a precedent for regulators who have been hesitant to move cannabis out of the margins of specialty care. For U.S. operators, the signal is not access to new products but the growing split between pharmaceutical cannabinoids and state-licensed cannabis businesses. Drug-class approval means long timelines, high costs, and insurance reimbursement, while dispensaries continue to operate without federal recognition. The political pressure that follows a European approval could still reach Washington, especially as lawmakers weigh rescheduling and public health officials search for safer opioid alternatives. The implications extend beyond pharma: the narrative that “cannabis works better than opioids” changes the playing field for everyone in the space.
🧠 THC Group Take: Pay attention to the optics as much as the approvals. A European regulator telling patients that cannabis outperforms opioids on safety is the kind of headline that travels quickly and shifts public perception. U.S. regulators will not fold that evidence into dispensary markets, but politicians will be asked why America lags behind Europe on recognizing medical value. Institutional investors should separate the two tracks in their models. Pharma cannabis belongs to the world of clinical trials and insurance pricing, while state markets remain built on cash sales and patchwork rules. Both can succeed, but they will never converge. The task is to understand which side of the divide you are playing on, and to plan accordingly.
Fast-moving headlines, flagged for what matters.
Ann Arbor Senator Jeff Irwin joined cannabis operators heading to Lansing ahead of Tuesday's Senate vote on a 24% wholesale tax that would push Michigan's total burden to 40% in a market where flower prices dropped from $500 per ounce in 2020 to $62 today. Irwin warns Michigan risks replicating California's collapse where excessive taxation pushed most sales to illicit channels, causing legal revenue to fall from $5.35 billion in 2021 to $4.6 billion in 2024. His alternative proposal focuses on heavy truck fees, but Senate leadership appears committed to cannabis taxation as part of budget negotiations despite 37 operators already losing licenses this year. For operators watching Tuesday's vote, the question is whether Michigan learned from California's documented failure or believes its market is somehow immune to the same economics that devastated West Coast legal sales. (WEMU, Crain's Detroit Business)
Columbus Senator Bill DeMora introduced legislation to ban intoxicating hemp sales to minors and prohibit products mimicking realistic humans, animals, or fruit, explicitly avoiding changes to voter-passed marijuana law unlike competing Republican bills. The bill targets the "stuff everybody agrees is bad" by requiring testing under marijuana rules and eliminating products resembling Skittles or Oreos that DeMora says are "poisoning kids," while Ohio remains one of 20 states with zero hemp regulations. DeMora's approach contrasts sharply with Republican bills, which bundle hemp restrictions with marijuana rollbacks including THC caps, dispensary limits, and revenue diversions that Democrats oppose. Governor DeWine wants hemp action and is exploring executive options if lawmakers stall, creating pressure for a standalone bill that could pass with bipartisan support. For hemp operators, DeMora's bill represents the best-case scenario in Ohio's restrictive environment: age-gating and testing requirements without the complete dispensary-only bans that Republican bills propose, though the reality is any restriction tightens what's been a regulatory free-for-all since the Farm Bill passed. (Ohio Capital Journal)
DOJ and the plaintiff challenging DEA's rescheduling process filed a joint motion extending their litigation stay through January 27, 2026, explicitly citing zero recent advancements despite Trump claiming a decision would come "within weeks" last month. Both parties asking for delays together means mutual acknowledgment nothing is happening, with the next status report pushed past holidays to signal no movement expected until next year. Trump posted a CBD video over the weekend, but the action here is a four-month extension on doing nothing. For operators who structured 2025 plans around rescheduling relief from 280E, this joint stay confirms federal reform timelines are fiction until they're not. (Marijuana Moment)
Senator Bernie Moreno admitted SAFER Banking needs rescheduling first because GOP colleagues won't vote for banking reform while cannabis remains Schedule 1, and he's eyeing Q4 passage but hasn't even filed the bill yet. Trump declined to reaffirm his rescheduling support when asked last month, creating a perfect excuse structure: blame rescheduling delays for banking delays, repeat indefinitely. The conditional sequencing Moreno describes means operators are waiting on Trump's DEA to finish what Biden's DEA started. For anyone who built 2025 plans around SAFER passage, Moreno just confirmed what the market knew: it's not moving. (Marijuana Moment)
A former Curaleaf regional compliance director filed a whistleblower lawsuit alleging Illinois regulators identified "a vast amount of unaccounted-for inventory" at the company's Litchfield cultivation center and suspected "systemic diversion" along with unlicensed pesticide use and safety violations. The allegations are notable because they come from a senior employee in Illinois, a $2 billion market with strict cultivation limits and square footage caps that typically prevent the oversupply conditions that encourage diversion in states like Oregon and Oklahoma. According to the lawsuit, state cannabis bureau chief Bresha Brewer told Curaleaf employees in December 2023 that regulators "remained deeply concerned" after finding the same unresolved issues across multiple site visits over nine months, and in February 2024 state inspectors halted all product shipments from Litchfield over missing and mislabeled inventory. The whistleblower claims he escalated concerns to company leadership 12 times before being fired in May 2024, allegedly in retaliation for reporting violations. It is clear that diversion happens even in tightly controlled markets when operators ignore compliance warnings, and Curaleaf's apparent indifference to repeated state flags suggests corporate culture problems that may exist across their 20-state footprint. (MJBizDaily)
A California jury awarded cannabis operator David Ju $1.9 million after determining Baldwin Park officials committed fraud during their licensing process, with $1.6 million coming directly from officials' pockets rather than city coffers. The verdict marks the first successful civil recovery against local politicians for corrupt cannabis permitting, according to LA attorneys, and matters because qualified immunity typically shields officials from personal financial liability. The plaintiff's attorney has five more cases queued against Baldwin Park, turning this verdict into a template for unwinding corrupt licensing deals. For operators frozen out by pay-to-play schemes, civil court just became more attractive than waiting years for federal prosecutors. (SFGATE)
Sen. Mitch McConnell turned on the 2018 Farm Bill he championed, proposing to criminalize all hemp-derived THC, with 58 Kentucky hemp farmers now demanding a meeting to warn him not to "criminalize their harvest." Cornbread Hemp, Kentucky's fastest-growing company at #122 on Inc. 5000, just announced the first THC beverage sponsorship with UofL athletics and is investing $1 million to add 50 Louisville jobs while simultaneously suing Tennessee over hemp restrictions. McConnell's spokesman claims he's "restoring original intent," but hemp farmers insist the 0.3% THC limit works exactly as designed. For operators who built businesses around federally compliant products, McConnell's reversal reveals the fragility of building on Farm Bill carveouts rather than comprehensive legalization, with the Kentucky Hemp Association warning of industry collapse. (Louisville Business First, WAVE 3)
The European Union Drugs Agency launched Cannapol, a three-year project to create cannabis policy guidelines for member states, but Germany, Netherlands, Malta, Czechia, Luxembourg and Switzerland are already building their own frameworks without waiting. Industry groups immediately called it a "promising box-ticking exercise" because EUDA has limited authority and can't say who they're consulting beyond "up to 50 individuals" across 10-12 countries. The toolkit won't address medical cannabis, and with 19 of 27 states supporting reform, the real action happens at national levels. For multinational operators, this confirms the bet on bilateral country deals rather than coordinated EU policy that arrives after markets form. (Business of Cannabis)
A study tracking 526 young adults found increased cannabis use frequency predicts increased binge drinking between ages 18-22, but after age 24 more cannabis correlates with less binge drinking. The research published in Alcohol: Clinical & Experimental Research shows the mid-20s shift potentially reflects lifestyle changes as brain development completes, with cannabis serving as the leading indicator since binge drinking frequency never predicted cannabis use. For policymakers debating substitution effects, this complicates simple narratives: substances appear complementary during peak risk years when binge drinking causes most harm, then potentially substitutive later when drinking moderates anyway. The findings suggest intervention opportunities for 18-22 year olds, though both substances remain widely available regardless of legal status. (Medical Xpress)
Indiana lawmakers tucked a complete marijuana advertising ban into a BMV procedures bill Governor Braun signed in May, but existing contracts are grandfathered, and Green Stem owner George Lynch signed 10-year billboard deals a month before passage. His three Indiana billboards stay up through 2035 while competitors get shut out, revealing either legislative incompetence or sophisticated lobbying by Michigan dispensaries who locked in decade-long access. For border-state operators, Indiana created a permanent competitive moat for early movers who read legislative tea leaves correctly. The timing matters because these grandfathered billboards will advertise legal products from neighboring states while Indiana potentially debates its own framework over the next decade. (Indiana Capital Chronicle, WANE 15)
Oklahoma's Senate Bill 1055 requires physicians recommending medical marijuana to complete initial courses and annual continuing education starting January 1, 2026, with three approved providers charging $120-$199. The legislation aligns Oklahoma with at least 11 other states, replacing prior rules requiring only general licensing with no cannabis-specific training. Critics including Dr. John Kell argue it's bureaucracy for bureaucracy's sake since determining which patients could benefit is straightforward, while the three approved course providers just gained a mandatory compliance market. For physicians already recommending cannabis, this represents new overhead in a program that operated seven years without specialized training requirements, suggesting regulators tighten controls as medical programs mature. (Tahlequah Daily Press)
The deeper pattern behind today’s moves — and why it matters next.
🧾 Context: San Francisco once held up Berner’s on Haight as proof its equity program was working. The symbolism was powerful: a former dealer turned advocate running the city’s first equity shop in partnership with Cookies, the state’s most recognizable brand. Tucked into the paperwork was a $10 million buyout clause that came due just as the city shortened its ten-year hold rule to five. Arbitration forced Cookies to pay $8.4 million for a store already shuttered, leaving the neighborhood with nothing but another dark window. Illinois has seen a parallel story, where equity permits were handed out as political victories but quickly flipped to well-capitalized operators or tied up in endless litigation. In New York, lawsuits and bureaucratic delays have stranded hundreds of equity licensees before they could open their doors. Los Angeles has hundreds of equity storefronts on paper but far fewer in operation, bogged down by red tape and predatory leases.
🔎 What It Signals: The common thread is that equity programs are designed around distributing licenses, not ensuring they survive. A permit carries political weight the day it is awarded, but the market realities set in long before equity applicants see stability. In Illinois, permits became tradeable commodities, enriched by scarcity and loopholes in transfer rules. In New York, political leaders promised thousands of equity businesses yet underfunded the support systems needed to launch them. In Los Angeles, real estate speculators cornered properties near designated zones, leaving equity licensees paying inflated rents that drain margins before opening day. San Francisco’s Haight Street collapse is simply the most vivid illustration of what happens when equity is treated as symbolism instead of structure. Each state repeats the same pattern with different window dressing.
🧠 THC Group Take: Executives and policymakers should stop asking how many equity licenses have been issued and start asking how many equity businesses are still standing after three years. The real measure is not ribbon cuttings but survival, ownership, and community impact once the cameras are gone. For companies, the takeaway is clear: scrutinize contract terms, exit rights, and capital structures as carefully as market forecasts, because those details decide who captures value when the store falters. For regulators, equity programs will keep failing until enforcement moves past the licensing phase and into the agreements and financing structures that dictate control. Investors should assume that every capped market will turn permits into financial instruments unless rules actively prevent it. Until those structural flaws are addressed, equity will continue to produce press releases that read like progress while neighborhoods get empty storefronts and broken promises.
From the hearing room to the comment section — we’re watching it all.
Context:
📝 Green Check's VP of Banking published an essay worth reading because it names the exhaustion of trying to fix systems never built to include you, like being told she walked too loudly through a bank lobby. Her advice: stop wasting energy breaking into wrong rooms and seek companies where diversity already exists in the C-suite, because fighting to be seen is exhausting. (CannaTech Today)
🎨 Canadian cannabis packaging remains trapped between regulatory constraint and brand ambition, with retailers sorting through "stuffed envelopes" that collapse on shelves while producers dream of premium positioning they're not allowed to execute. The contrast with US markets is stark: California operators use packaging as brand storytelling while Canadian companies add aftermarket stickers just to distinguish between vape SKUs. (StratCann)