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October 10, 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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We’ve skipped the Read-In this morning to bring you a timely Decoded Insight on intoxicating hemp, and the political chaos it’s triggering from coast to coast. Readers have noticed fewer insights lately, and you’re right: they take time to produce. We only publish them when something’s worth unpacking. When we see something, we’ll write something - and if you’ve got ideas, send them our way.
A new episode of The Hybrid drops soon, and you won’t want to miss it.
⚖️ States fracture on intoxicating hemp
🏛️ Governors push executive authority to its limits
🌿 Regulated markets fight to stay competitive
Enjoy the weekend — we’ll see you next week.
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The deeper pattern behind today’s moves — and why it matters next.
States Fracture on Intoxicating Hemp as Gas Station Gummies Threaten Legitimate Beverage Industry
🧾 Context: States are splitting dramatically on how to handle hemp-derived intoxicating products, with approaches ranging from outright prohibition to sophisticated regulatory integration. California Governor Gavin Newsom issued emergency regulations in September 2024 banning any detectable THC in hemp products, later codified through legislation he signed in this month which forces all intoxicating cannabinoids into the licensed cannabis framework after a court blocked an industry attempt to halt enforcement. Texas Governor Greg Abbott issued an executive order in last month requiring age-gating at 21, testing, and labeling after the Legislature deadlocked between his regulatory preference and Lieutenant Governor Dan Patrick's preferred outright ban. Ohio Governor Mike DeWine declared a 90-day emergency ban on intoxicating hemp sales starting next week, while Illinois Governor JB Pritzker threatened executive action after the Legislature failed to pass regulation in January 2025, with House Speaker Chris Welch requiring 60 Democratic votes before advancing any bill. Tennessee took a legislative approach, with Governor Bill Lee signing a new law in May 2025 to ban THCA and synthetic cannabinoids effective January 2026 while transferring regulatory authority from Agriculture to the Alcoholic Beverage Commission with a three-tier distribution system modeled on alcohol. Minnesota went the opposite direction, allowing hemp beverages on tap at breweries as of July 2024 and permitting on-site consumption at licensed alcohol establishments, creating a nearly $200 million market with 4,000 registered retailers. Maryland's appellate court upheld state authority to regulate intoxicating hemp products in September after the hemp industry challenged restrictions, while litigation continues to emerge wherever governors use executive authority to impose bans on federally legal products.
🔎 What It Signals: The 2018 Farm Bill legalized hemp without anticipating manufacturers would exploit the 0.3% delta-9 THC threshold to create intoxicating products through conversion processes and THCA loopholes, creating a federally legal market that states are now attempting to restrict through executive and legislative action that invites Commerce Clause challenges. Maryland watched adult-use cannabis sales growth collapse from 36% in year one to just 11% in year two as untested, untaxed hemp products sold at gas stations undercut licensed operators who invested millions in compliance infrastructure. The House approved Representative Mary Miller's amendment to the Farm Bill that would ban all hemp products containing "quantifiable" THC, effectively eliminating 90-95% of the hemp market including most CBD products, while the Senate Agriculture Committee passed similar language with a one-year implementation delay after Senator Mitch McConnell pushed to redefine his hemp legalization legacy. Legitimate hemp beverage companies that impose their own age-gating, testing, and serving size restrictions face impossible compliance burdens navigating 50 different state frameworks while competing against unregulated synthetic cannabinoids in cartoon packaging sold at convenience stores. Binary policy responses treat responsible hemp beverage manufacturers the same as gas station gummy operators, forcing states to choose between prohibition that invites litigation over federally legal commerce or unregulated chaos that undermines licensed cannabis operators who face expensive compliance requirements. The litigation risk is particularly acute for executive orders and emergency regulations that bypass legislative processes, as hemp industry attorneys argue states cannot ban products Congress explicitly legalized without clear statutory authority.
🧠 THC Group Take: The problem everyone's trying to solve is gas station gummies in cartoon packaging sold without age verification next to actual candy, often containing synthetic cannabinoids that have nothing to do with responsible hemp beverage production. Minnesota accidentally built a functional model by treating hemp beverages like alcohol: age-gated, sold through establishments with liquor licenses, available on-premise at breweries where consumption is supervised. Tennessee's transfer to the Alcoholic Beverage Commission recognizes that regulatory infrastructure for age-restricted intoxicants already exists rather than building parallel systems. What legitimate hemp beverage operators have been doing voluntarily is exactly what regulation should require: reasonable THC limits per serving, laboratory testing for contaminants and potency, child-resistant packaging, clear labeling, and sales restricted to age-verified channels. The policy failure is treating that responsible segment identically to unregulated synthetic cannabinoids, as if a taproom serving 5mg THC seltzers to verified adults poses the same risk as a gas station selling 50mg gummies made with poison to anyone tall enough to reach the counter. Executive orders banning federally legal products invite expensive litigation that states may lose, particularly when governors bypass legislatures to impose restrictions on interstate commerce. Licensed cannabis operators have legitimate concerns about hemp companies avoiding expensive compliance requirements, and hemp beverage manufacturers have legitimate concerns about being priced out by licensing fees designed for vertically integrated cannabis operations requiring millions in capital investment. Both industries lose when the policy response is binary rather than graduated based on product type, potency, and point of sale. States capable of distinguishing between responsible hemp beverage production in age-restricted venues and unregulated products in convenience stores will capture tax revenue while protecting public health without inviting Commerce Clause challenges. States treating all hemp-derived THC identically will watch beverage manufacturers relocate to friendlier jurisdictions while synthetic cannabinoid sales move online to platforms state regulators can't effectively control, all while spending taxpayer money defending executive orders in federal court. The strategic opportunity is acknowledging that THC beverages produced safely with appropriate restrictions have demonstrated consumer demand and can coexist with licensed cannabis markets when the regulatory framework matches risk to oversight rather than applying identical rules to fundamentally different distribution models.
Fast-moving headlines, flagged for what matters.
Disclosure: I served as Executive Director of the Massachusetts Cannabis Control Commission when the initial summary suspension was issued in March 2023.
The Massachusetts Cannabis Control Commission voted unanimously to revoke Elev8 Cannabis's license, marking the first time the agency has permanently stripped a dispensary license since adult-use sales began in 2018. The Athol dispensary owner Oluwaseun Adedeji allegedly threatened to kill employees in October 2022 and posted videos in March 2023 saying "you touch my business, I will kill you" and "I'm gonna come for your everybody, your whole family tree" before being arrested. It was then that I ultimately issued the initial summary suspension order. The 34-page decision cites incompetent operation, unsuitable conduct posing serious risk to public safety, a pattern of deceiving commission staff, and repeated failures to take corrective action after three Notices of Deficiency covering issues from sleeping at the dispensary to failing to maintain real-time inventory tracking and missing surveillance footage. The final revocation follows administrative hearing processes that concluded this month, with the license having been non-operational since the March 2023 suspension. (Boston Herald)
Washington's Liquor and Cannabis Board opened a formal rulemaking inquiry into requiring harvest and processing dates on all cannabis product labels after a Seattle consumer petitioned the agency. The state currently mandates potency and business information on packaging but made harvest dates optional in 2016, forcing consumers to request certificates of analysis to estimate product age, except those certificates only show testing dates, not actual harvest dates. The petition argues medical patients need to know storage duration because cannabinoid profiles degrade over time, making dosing unreliable. Public comment runs through November 14. Every mature market eventually faces this question: Washington pulled back harvest date requirements eight years ago, likely because tracking systems weren't robust enough and compliance costs seemed burdensome during market buildout, but now consumers can check Leafly reviews faster than they can verify whether their flower sat in a warehouse for nine months. (The Inlander)
Maryland's adult-use cannabis sales growth declined from 36% in the first year to just 11% in year two, with total monthly sales barely moving from $100.6 million in August 2024 to roughly flat by August 2025, according to Maryland Cannabis Administration data. Licensed cultivator SunMed Growers says intoxicating hemp products sold through smoke shops and delivery apps are "the exact same product" they produce but face zero testing requirements, no taxes, and no regulatory compliance costs while state-licensed operators invested millions to meet strict standards. That story rings true across the country. Maryland also increased its cannabis tax from 9% to 12% effective October 1st, compounding the competitive disadvantage even after a September appellate court ruling gave the state authority to regulate intoxicating hemp products sold outside licensed dispensaries. States are splitting between outright bans on hemp-derived intoxicants and regulatory integration models, but the smarter path is bringing responsible hemp operators into the existing framework with age-gating, testing, and reasonable taxes that acknowledge consumers don't care whether their THC came from hemp or marijuana as long as it's safe and accessible. The policy opportunity everyone's missing is that it's the same plant producing the same molecule, so fighting over botanical classification while unregulated gas station gummies undercut licensed operators serves nobody's interests except alcohol distributors and pharmaceutical companies who benefit when the cannabinoid industries destroy each other. (Baltimore Sun)
The Senate Judiciary Committee voted 12-10 to advance Sara Carter Bailey's nomination as ONDCP director despite ranking Democrat Dick Durbin calling her "totally, wholly unqualified" for lacking medical, addiction treatment, law enforcement, or prosecution experience. In written responses to Senators Durbin and Booker following her September 17th hearing, Bailey repeatedly dodged direct questions about her support for medical cannabis legalization and rescheduling, stating only that she would "comply with all federal laws and fulfill all statutory responsibilities" and work with the interagency to "ensure an examination of all facts and evidence." Bailey had previously said on her podcast that medical cannabis is "a fantastic way" of managing cancer and she doesn't "have any problem" with legalization if monitored, but federal statute prohibits the drug czar from endorsing Schedule 1 drug legalization without FDA approval. The rescheduling process has been frozen for nine months after a DEA administrative law judge granted an interlocutory appeal, and despite DEA Administrator Terry Cole calling it "one of my first priorities" in April, the agency filed its third 90-day update in October admitting zero progress on even setting a briefing schedule. Bailey becomes the second consecutive drug czar with medical cannabis credentials after Biden's director Rahul Gupta consulted for cannabis businesses and ran West Virginia's medical program, though her vague testimony suggests she understands the statutory constraints better than her personal views on cannabinoid policy. (Marijuana Moment)
Senator Thom Tillis asked Attorney General Pam Bondi to investigate the Eastern Band of Cherokee Indians' cannabis operations during an October 7 Senate Judiciary Committee hearing, accusing the tribe of predatory marketing with pumpkin spice-flavored products and questioning whether transporting cannabis from tribal cultivation sites to their dispensary violates federal law. Tillis claimed EBCI's marketing "kind of seems like it's preying on young people" and expressed concern about their ordering app serving customers from surrounding illegal states, while also questioning how the tribe legally transports cannabis between non-contiguous parcels of tribal land. EBCI Principal Chief Michell Hicks responded that suggesting the tribe would endanger children "is inaccurate and it is offensive to the values that guide our tribe," adding that Tillis described them as "an island in a far, forgotten corner of the state" yet "we are not afforded real representation from his office." The contradiction is stark: Tillis told Bondi "we've got to get it solved at the federal level" because even red states are legalizing, yet simultaneously attacks one of the few legal cannabis operations in North Carolina operating under tribal sovereignty - revealing his real concern isn't youth marketing or federal law compliance but rather who controls cannabis commerce in his state, particularly given Chief Hicks noting Tillis's frustration over EBCI's opposition to Lumbee Tribe federal recognition that he champions. (NC Newsline, WLOS)
32 bipartisan state attorneys general urged Congress in July to pass SAFER Banking because cash-heavy cannabis operations create fraud and theft risks while limiting states' ability to collect taxes and oversee revenues, but Senate Banking Chairman Tim Scott hasn't signaled the bill is a priority and House Speaker Mike Johnson opposed the predecessor SAFE Banking Act when it passed with 180 cosponsors four years ago. Former Ohio Senator Sherrod Brown, who advanced SAFER through committee in 2023 before losing his seat, is running for Jon Husted's seat and could return as an influential champion, while current GOP sponsor Bernie Moreno says rescheduling is "an important domino" before colleagues will move on banking. Republican Senators Pete Ricketts, John Cornyn, James Lankford, and Ted Budd remain opposed, warning the legislation would increase youth marijuana access (huh?) despite the $31.4 billion legal cannabis industry now approaching distilled spirits' $37.2 billion in annual sales. The jammed legislative calendar with Trump nominees, defense authorization, and shutdown fights gives lawmakers cover to avoid a vote they'd rather not take, and the rescheduling prerequisite is mostly theater since banking access and scheduling are separate policy questions that have nothing to do with each other functionally. (National Journal)
From the hearing room to the comment section — we’re watching it all.
🏥 Pennsylvania Senator John Kane introduced bipartisan legislation allowing terminally ill patients with life expectancy under one year to use non-smokeable medical marijuana in hospitals, modeled after California's law and named Ryan's Law after cancer patient Ryan Bartell who was sedated on opioids and unable to interact with family during California hospital treatment. The bill requires hospitals to permit medical cannabis use and develop storage guidelines but doesn't require facilities to recommend marijuana or include it in discharge plans, while stipulating hospitals can't prohibit use solely because cannabis remains Schedule 1 federally. (Fox43)
🍺 Charlotte breweries NoDa and Resident Culture launched hemp-derived THC seltzers that now represent 20% of Resident Culture's revenue, while Sycamore plans new locations and some legacy operators like Olde Mecklenburg Brewery have zero interest in cannabinoid beverages. North Carolina has no regulatory framework yet, so breweries are operating in the same gray area Minnesota occupied before formalizing rules, proving consumer demand exists when responsible operators impose their own age-gating and dosing limits even without state mandates. (Axios Charlotte, WCCB Charlotte)
📊 The MRI-Simmons poll found 64% of Americans expect cannabis legal in all 50 states within five years, which tracks with growing institutional confidence but completely ignores the structural reality that federal legalization requires either 60 Senate votes or reconciliation gymnastics neither party can execute. Executives pricing acquisition targets and capital deployment timelines based on nationwide market access by 2030 are building models on polling data instead of legislative math. (Marijuana Moment)
🚌 Denver entrepreneur Victoria Osler launched mobile cannabis lounge Dreamy Illusions in August after earning her Cannabis Hospitality Specialist Certificate from MSU Denver, charging $79 per person for tours that stop at dispensaries, Ball Arena, Coors Field, and breweries where passengers consume onboard. Some state cannabis programs don’t allow edibles or pre-rolls, but in Colorado you can consume on a party bus. Make it make sense. (9News, Denver Post)
🏌️ Golf participation hit 26 million Americans in 2024 with Millennials and Gen Z comprising nearly half of all golfers, drawn by social lifestyle appeal rather than the game itself, according to the National Golf Foundation. The modern drinks cart evolved into mobile craft bars with signature cocktails as courses realized golfers want the bar to come to them, transforming golf from quiet gentleman's game to clubhouse party where the vibe matters as much as the scorecard. If you ask me where the THC beverage trend is headed next? Hopefully my home course. (The Fresh Toast)
🎃 The annual Halloween THC candy panic arrived right on schedule, with breathless warnings about Stoney Patch and Nerdy Bears despite zero documented cases of strangers deliberately handing out expensive cannabis products to trick-or-treaters. The one Washington hospitalization involved a child who ate an entire 600mg bag, which raises questions about where an 8-year-old obtained a regulated product and why basic household storage failed, not whether your neighbor is spending $30 per house to drug random children. (The Mirror)