Virginia Moves Forward on Adult-Use Cannabis Sales
Former Congressman Matt Gaetz just set off a bomb today in the cannabis industry. Gaetz tweeted out that the DEA is drafting a rule to reschedule cannabis, and are moving it ASAP. Is there some truth to this? Wednesday’s Trade To Black podcast, hosted by Shadd Dales and Anthony Varrell, centered on former Congressman Matt Gaetz’s explosive tweet suggesting the DEA is drafting the cannabis rescheduling rule. The hosts expressed significant concern about this development, with Varrell arguing that DOJ, not DEA, should be writing the rule. He pointed to the DEA’s historically obstinate behavior throughout the rescheduling process, including their refusal to sign earlier rulings, and warned that DEA authorship could create legal vulnerabilities that opponents like Bill Barr might exploit in litigation. We also dive into Virginia’s news on adult use cannabis.
Cannabis attorney Shane Pennington joined the show to provide legal clarity on the situation. Pennington explained that while DEA typically handles scheduling rules, the proposed rule explicitly stated DOJ would issue the final version. He acknowledged uncertainty about whether Gaetz misspoke or if something has changed in the process, but emphasized that no one truly knows the timeline or internal developments. Pennington pushed back against overly optimistic predictions, noting that while the executive order mandates expeditious action, balancing speed with legal defensibility requires discretionary decisions that remain behind closed doors.
Virginia delivered positive news as lawmakers approved legislation to legalize recreational cannabis sales, not just possession, with a potential November 2026 launch date. However, the bill includes a controversial ten million dollar conversion fee for medical operators transitioning to recreational licenses, which could prove prohibitive for smaller companies. Major operators are expected to pay the fee and move forward in what analysts predict will be a strong market.
Hawaii emerged as an underappreciated opportunity, with a state commission report suggesting adult-use legalization could generate ninety million dollars monthly in revenue. The hosts attributed this potential to Hawaii’s robust tourism industry, comparing it to Florida’s market dynamics, though they noted the state government has struggled to advance legalization despite the clear economic incentive.
The United Center in Chicago announced it will serve Rhythm brand hemp-derived THC beverages at concerts and live events, though not at Bulls or Blackhawks games due to league restrictions. This mainstream venue adoption represents a significant step toward destigmatization, though questions remain about the hemp beverage industry’s viability given the upcoming regulatory deadline. Finally, Vireo Growth entered a non-binding agreement to acquire Hawthorne gardening from Scott’s Miracle-Gro, continuing its aggressive acquisition strategy despite a bloated share structure that may eventually require a reverse split.
