Cannabis Musings - April 18th, 2025

Some more thoughts on Curaleaf's Florida hemp thing.

Friends, we talked yesterday about Curaleaf’s transmogrification of one of its Florida-based licensed medical dispensaries into a “fully dedicated hemp retail storefront”. I was talking with friend-of-the-newsletter and DEA regulatory lawyer Shane Pennington (now a Partner at Blank Rome LLP) about the move, and he inspired me to think a little further about what it all means.

In short, this change pretty much sums up the sheer absurdity of where US cannabis is today. It is the ne plus ultra of narishkeit. It is the <chef’s kiss> of policy insanity. Let me explain.

To appreciate how great this is, you need to really understand the preposterousness of how we got here. Step back to 2018, when Congress passes the Farm Bill and carves out hemp from the definition of “marihuana” for purposes of the Controlled Substances Act. Even before the bill gets signed into law, it’s pointed out that the definition of “hemp” is underdrafted, leaving a lot of room for creative lawyers to interpret a carveout for hemp-derived products that offer enough THC to have a psychoactive/psychotropic effect (i.e., get you high). No one thinks that Congress ever intended this to happen (and there’s nothing in the Congressional record to suggest it), which is what makes it a “loophole”, but even after this is called out, Congress does nothing.

In time, some industrious cannabis folks develop products rich in hemp-based Delta-8 THC. A robust debate within the cannabis legal community ensues about whether the loophole can properly be read into the definition of “hemp” is valid, but that’s all academic. Instead, a landslide of irrationality and folly ensues:

• Congress’s utter laziness/willful ignorance results in the failure to close the loophole through a simple language tweak, despite years of opportunity.

• A federal appellate court rules in mid-2022 in a trademark case that the loophole is valid.

• The legislature in Minnesota accidentally legalizes hemp-derived THC products in July 2022. Even though lawmakers immediately realize the mistake, they don’t fix it, opening the floodgates for the state to become the center of hemp drinks development.

• The FDA and the DEA do nothing to stop the sale of these products, despite it being fairly clear that (at least for the drinks and edibles) they violate the Food, Drug, and Cosmetic Act, unless you count a mealy-mouthed press release issued over two years after the referenced trademark case as ‘doing something about it’. Reader, enforcement did not ensue.

• The organized opposition to all of this on the part of licensed (non-hemp) cannabis operators is as ineffective as a soggy kreplach, what with the multiple trade groups with differing constituencies, disparate interests, and lack of sufficient funding for lobbying.

• Alcohol beverage distributors (and there’s really only a handful that control most of the national market) and retailers get comfortable enough with the loophole and FDA problem to start distributing and selling THC hemp drinks in the states that still allow them.

All of this policy backwardsness created a miasma in which hemp-derived THC products could flourish. And why not? The only people complaining were (are) licensed (non-hemp) cannabis operators who were (are) now facing yet another low-cost, much less regulated/taxed competitor for their products (in addition to the legacy/unlicensed market), selling substantially similar products to consumers who generally don’t know/care about the difference (other than cannabis connoisseurs/snobs), but who just want to buy something at a cheaper price and with much less hassle. The years of drastic inaction only served to empower hemp operators who were burned once before by the FDA’s failure to greenlight hemp-derived CBD (which, in 2019, was viewed as the next killer consumer product), and were not going to miss out on an even bigger opportunity.

Fast forward to 2024. You can’t swing a dead cat without hitting a new THC hemp drink brand (we talked about this a few weeks ago). There’s a ballot measure in Florida slated for the November election to legalize adult-use cannabis in a state that’s currently medical-only. You may have already heard how that worked out, despite Trulieve and others’ pumping about $150 million into the pro-initiative campaign. The failure was due in part to the intense opposition by Florida Governor Ron DeSantis, who is now under investigation for allegedly funneling state funds into his wife’s charity that then donated $10 million to anti-initiative campaigns. Apparently unaware of the concept of irony, DeSantis opposed the initiative because of his dislike for cannabis, but he’s apparently cool with hemp, having vetoed a bill in mid-2024 that would have restricted the sale of THC hemp products in the state (a new hemp bill just got through the Florida legislature – we’ll see what he does with that).

And so (again, ironically), here we are, after more money was spent in Florida to support/oppose recreational cannabis than the 2024 nominal gross domestic product of Mississippi, Curaleaf opens, to great fanfare, what is pretty much an adult-use cannabis dispensary slinging mostly-legal hemp products, while Trulieve is out over $140 million and DeSantis is under investigation for corruption. At least Curaleaf’s store is only selling drinks and edibles, so DeSantis doesn’t have to worry about the “smell” that so concerns him.

This really sums up how Kafkaesque everything has been and has become. One of our rules is that cannabis policy is never rational, and this tale pretty much exemplifies that bon mot. To me, having observed and pondered and worked in this industry for some time now, it’s the most cannabis thing ever.

(In case you’re wondering ‘okay, what do we do about this?’, I honestly don’t know beyond waiting to see what happens with the Farm Bill renewal. Until then, och mir a leben! (“This you call a living?!?”).)

Upgrade now to Paid ($5 per month - Cheap!) and get your questions answered by the Law-Talking Guy!

© 2025 Marc Hauser. None of the foregoing is legal, investment, or any other sort of advice, and it may not be relied upon in any manner, shape, or form. The foregoing represents my own views and not those of Jardín.