In this week’s edition:

• DEA Rescheduling Hearing Delayed
• Legal Cannabis Now a Bipartisan Issue
• Polling Shows Majority Support for Cannabis Legalization in Florida
• Nebraska Registered Voters Reportedly Support Medical Cannabis Ballot Measure
• NM Cannabis Businesses Sue CBP Over Cannabis Seizures
• No Linear Correlation Between THC Level and Driving, Research Finds

Federal

DEA Rescheduling Hearing Delayed – Shortly after U.S. Drug Enforcement Administration (DEA) Administrator Anne Milgram signed off on over two dozen witnesses to participate in the rescheduling hearing, Chief Administrative Law Judge John Mulrooney issued a preliminary order signaling that the information provided on those set to testify was insufficient and requesting additional details and potential availability for a formal hearing in January or February 2025.

Kamala Harris Has “To-Do List” - Cannabis Legalization Is On It – Vice President Kamala Harris has outlined her key priorities if elected into office, with the legalization of recreational cannabis ranking sixth on her To-Do list. Harris emphasized a focus on constructive policies rather than punitive actions, highlighting her commitment to legalizing cannabis as part of her broader agenda.

Cannabis Legalization Should Ensure Communities Harmed By Criminalization Get “First Shot To Make Money,” Tim Walz Says – Minnesota Gov. Tim Walz (D), the Democratic vice presidential nominee, has emphasized that cannabis legalization should include policies that prioritize economic opportunities for communities disproportionately affected by criminalization, particularly the Black community. During a campaign speech, Walz highlighted the need for these communities to have the first chance to benefit financially from the legal cannabis industry, addressing historical injustices. He also discussed the importance of states’ rights in setting cannabis laws and the need for federal reforms to improve banking access for state-licensed cannabis businesses.

JD Vance Acknowledges Rarity of Fentanyl Laced Cannabis – Senator JD Vance (R-OH), the Republican vice presidential candidate, has admitted that fentanyl-laced cannabis is a rare occurrence, despite frequently raising concerns about it during his campaign speeches. In an interview with comedian Theo Von, Vance discussed the fentanyl crisis and admitted that while there are stories of cannabis being contaminated with fentanyl, such cases are not widespread. The discussion also touched on the broader impact of fentanyl on the drug supply and the risks it poses to users.

Legal Cannabis Now a Bipartisan Issue  - Cannabis reform has emerged as a rare bipartisan issue in the current presidential election, with both Donald Trump and Kamala Harris expressing support for easing restrictions. Trump has indicated he will vote for legal weed in Florida's upcoming referendum, while Harris has vowed to legalize cannabis at the federal level. The shift reflects a broader trend, as more than two dozen states have already legalized adult cannabis use. Advocates argue that legalization allows law enforcement to focus on more serious crimes, while opponents, including some Republicans, express concerns about the potential for increased disorder and dysfunction. Despite these concerns, public support for cannabis legalization is strong, with two-thirds of voters, including a majority of Republicans, favoring federal legalization. The growing consensus suggests that the divide between state and federal cannabis policies may soon be resolved.

New Mexico Cannabis Businesses Sue U.S. Customs and Border Protection Over Seizures – A coalition of New Mexico cannabis businesses has filed a lawsuit against U.S. Customs and Border Protection (CBP), alleging unconstitutional seizures of state-legal cannabis products and unlawful detainment of industry workers. The lawsuit claims that CBP's actions have resulted in significant business disruptions, loss of revenue, and conflicts with state cannabis regulations. The plaintiffs argue that these actions violate the Fifth Amendment's protections against unlawful searches and seizures and contradict the federal government's policy of non-interference with state-legal cannabis programs. The lawsuit highlights instances of inhumane treatment of detained workers and suggests that CBP's actions may inadvertently support illicit operators by undermining the state's cannabis regulatory framework.

Federal Circuit Court Sets December Hearing for Lawsuit to Legalize Cannabis – A significant lawsuit challenging federal cannabis prohibition has advanced to the First Circuit Court of Appeals, with a hearing scheduled for December 5. The case, initially dismissed by a lower federal court in Massachusetts, involves several major cannabis companies. The plaintiffs argue that the development of the national cannabis market undermines 2005 U.S. Supreme Court precedent (Gonzales v. Raich). The upcoming hearing will feature oral arguments from both sides, and if the First Circuit upholds the dismissal, the plaintiffs plan to petition the U.S. Supreme Court, potentially leading to a high court ruling by 2025 or 2026.

State

AZ – Arizona is among eleven states who are projected to surpass the $1-billion mark in total retail sales at licensed cannabis dispensaries. The states include California, Michigan, Florida, Illinois, Massachusetts, Pennsylvania, Missouri, Colorado, Arizona, Washington, and Maryland. Notably, Florida and Pennsylvania are medical-only markets.  Meanwhile, the Arizona Department of Health recently began allowing adult use cannabis deliveries ahead of schedule on November 1, expanding a service that was previously only available to medical patients.

DE  - Delaware has initiated the process of awarding its first adult-use cannabis manufacturing and cultivation licenses through a state-run lottery, aiming to launch recreational sales by March 2025. The lottery, conducted via Facebook Live, saw 727 of over 1,200 applicants qualify for consideration. The state's 13 existing medical dispensaries are expected to receive adult-use permits next month. Delaware's licensing structure is intended to promote social equity, reserving half of the retail permits for eligible candidates. Gov. John Carney also signed legislation protecting financial institutions and service providers from state prosecution for working with licensed cannabis businesses.

FL – Although polling shows majority support for cannabis legalization in Florida, the outcome remains unclear as a 60 percent threshold is needed for passage under state law. Gov. Ron DeSantis (R) told reporters that the ballot initiative was spurred by corporate greed and voters should be cautious of special interests.

IN – Indiana gubernatorial candidates discussed cannabis legalization during a recent debate. Libertarian candidate Donald Rainwater stated that he is the only candidate that believes all forms of cannabis should be legalized immediately, that this is a constitutional right, and that the infrastructure is already in place for other types of substances. Democrat Jennifer McCormick emphasized that a legalization plan is important, and that Indiana will learn from the failures and successes in other states to move forward strategically on day one of her administration. Republican Mike Braun acknowledged that legalization is “cascading across the country” and that it is likely time to legalize medical cannabis in Indiana, but in close consultation with law enforcement and the state legislature.    

KY – On Monday, October 28th, Kentucky held a lottery for cultivator and processor licenses, issuing 16 total licenses for cultivators (10 for Tier I cultivators, four for Tier II cultivators, and two for Tier III cultivators) and 10 licenses for processors. Lotteries for dispensary licenses will be held on November 25th and December 16th.

MA – The Massachusetts Cannabis Control Commission (CCC) selected David Lakeman as new executive director of the agency. Lakeman has been leading the cannabis division at the Illinois Department of Agriculture and worked previously at the CCC from 2018 to 2020 as head of government affairs. The commission has been without a permanent executive director since Shawn Collins resigned in fall 2023, with Debra Hilton-Creek serving as acting executive director in the meantime.

MO – Missouri plans to invest millions to establish a “reference” laboratory that will ensure the safety and potency of over $1 billion in cannabis products sold annually. Health experts and consumer groups support the initiative, which aims to provide independent quality assurance and will operate out of the Missouri State Public Health Laboratory in Jefferson City. The lab is expected to be fully functional by fall 2025. The lab will focus on testing cannabinoid levels and contaminants, addressing potential conflicts of interest with privately licensed laboratories.

NE – A new poll from a multistate survey conducted by Emerson College Polling and the Midwest Newsroom shows that nearly six in ten Nebraska registered voters support legalizing medical cannabis through a pair of initiatives on the November ballot. Another third say they are opposed to the policy change, while fewer than one in ten remain undecided.

NY – New York State Supreme Court Justice Frederick Reed ordered the owner of a cannabis store in upstate New York to pay $9.5 million for selling cannabis without a license since at least September 2022. The judgment against George West, who owns Jaydega 7.0 in Canandaigua, was issued after West allegedly ignored a June 2023 notice from the Office of Cannabis Management to cease activity. In other news, OCM instituted its next major equity-focused program, the Community Reinvestment Program, which involves a series of community-oriented grants for non-profits funded by adult-use cannabis tax revenue.

NY – A Queens judge ruled that a New York City law allowing the quick closure of over 1,000 businesses accused of selling cannabis without licenses is unconstitutional, as it violates shop owners' due process rights. The decision strikes at the legality of the city's enforcement initiative, known as Operation Padlock to Protect, which Mayor Eric Adams (D) has praised as a success. The city intends to appeal the ruling.

SD – According to recent polls, only 45 percent of respondents in South Dakota say they intend to vote in favor of legalizing cannabis for adult use. Initiated Measure 29 will be the third cannabis legalization initiative posed to South Dakota voters in as many elections.

UT – A recent poll conducted by Noble Predictive Insights found that about 50 percent of Utah voters support legalizing adult-use cannabis. In comparison, 38 percent of voters believe that only medical cannabis should be available, 9 percent believe that cannabis should be prohibited entirely, and 3 percent were “not sure.”

WA – The Washington Liquor and Cannabis Board announced it does not anticipate launching an improved tracking system for the cannabis industry until 2031. The announcement comes after a recent audit uncovered nearly 60,000 products in the system with dates predating cannabis legalization, as well as about 600,000 reported dates set in the future. According to reports, the “stopgap” system that is still in place twenty years after legalization lacks the capability to provide enforcement officers with real-time tracking data, and errors—such as misplaced decimals in sales reports—are frequent. As one example, the system reportedly recorded annual cannabis sales of $7.7 billion in 2022, while the Department of Revenue estimated sales at only $1.3 billion for the same year.

Hemp

National Hemp Association Receives $19.6 Million From USDA – Last month,  the United States Department of Agriculture granted The National Hemp Association (NHA) $19.6 million to monitor hemp cultivation's effects in the Chesapeake Bay region as part of the Regional Conservation Partnership Program, which is designed to address conservation challenges including water and soil quality. The initiative will involve cultivating hemp on 5,000 acres annually, aiming to reduce nutrient runoff, pesticide contamination, and soil erosion while enhancing the health of local ecosystems.

D.C. – Two hemp retailers in the district, Capitol Hemp LLC and District Hemp Botanicals LLC, have filed a lawsuit against the city's Alcoholic Beverage and Cannabis Administration (ABCA), alleging unjust targeting and inventory embargoes. The lawsuit claims the ABCA mistakenly identified their federally legal hemp products as illicit cannabis, pushing the businesses to the brink of collapse. Despite attempts to clarify the legality of their products, ABCA officials have not relented, listing the retailers as unlicensed cannabis facilities. The suit argues that the crackdown, intended to curb illegal cannabis activity, has wrongly impacted compliant hemp businesses, causing significant disruption and potential irreparable harm. The case is filed in the Superior Court of the District of Columbia, Civil Division.

GA – The Department of Agriculture promulgated regulations last month implementing SB 494, which was enacted this past summer. Among other things, the new bill and related regulations introduce age limits and impose new labeling and testing requirements.  In addition, products must now test for a “total delta-9-THC concentration” that accounts for both the amount of delta-9-THC and THCA in a product. Hemp food products (except gummies) are also prohibited.

LA – The state’s hemp industry filed a federal lawsuit against the governor and attorney general, challenging a new state law (Act 752) that aims to regulate intoxicating hemp products, claiming it conflicts with the 2018 Farm Bill that legalized hemp. The lawsuit, initiated by the Hemp Association of Louisiana and Cypress Hemp LLC, argues that the law narrows the definition of hemp, effectively recriminalizing certain hemp-derived products and jeopardizing thousands of jobs in the state. The plaintiffs seek a ruling that the law is preempted by the 2018 Farm Bill, violates the U.S. Constitution's commerce clause, and infringes on their due process rights, along with a temporary restraining order and reimbursement of costs.

TX – Texas hemp product businesses have filed a lawsuit in federal court against the City of Allen and various law enforcement agencies (including local police and the DEA), alleging an illegal raid on their stores and unlawful arrests. The plaintiffs claim their constitutional rights were violated through the use of an overly broad search warrant and outdated testing methods that mischaracterized legal hemp products, including THCA products, as illegal. The lawsuits seek, among other things, immediate and permanent injunctive relief.

International

Uruguay – Regulators in Uruguay are now permitting pharmacies in the country to sell a new cannabis strain called Épsilon, which has a THC content of up to 20 percent and a CBD content of up to 1 percent, making it the fourth and most potent variant yet available to customers. The introduction of Épsilon follows earlier strains Alpha, Beta, and Gamma, with sales of cannabis in pharmacies significantly increasing since its 2013 legalization. The move has drawn criticism from some political figures, including criticism directed towards the putative lack of studies on the effects of cannabis use. Supportive officials defended the release by comparing the cannabis industry to wine production, emphasizing consumer choice and the regulated market.

Business

American Institute of Certified Public Accountants Requests Updated Federal Cannabis Guidance – The American Institute of Certified Public Accountants (AICPA) is urging the Treasury Department and Internal Revenue Service to update federal tax guidance for cannabis businesses as the issue of rescheduling cannabis progresses. The association is seeking clarity on IRS code 280E, which prevents cannabis companies from claiming federal tax deductions, and requests that businesses be allowed to amend past tax deduction claims in light of potential changes.

Medicine

Cannabis Reduces Chronic Nerve Pain With ‘Minimal To No Side Effects,’ New Study Reveals – A recent review published in the journal Cureus highlights cannabinoids’ ability to provide significant relief from chronic nerve pain with minimal to no side effects, suggesting cannabinoids may offer a powerful alternative to conventional pain medications. Analyzing five placebo-controlled studies from 2000 to 2024, researchers found that cannabinoids delivered notably more pain relief compared to placebo, with transdermal CBD particularly effective for sharp pain reduction.

No Linear Correlation Between Blood THC and Driving Performance, Research Finds – A recent review of research on cannabis and driving found no significant linear correlation between blood THC levels and driving performance, though some complex driving tasks showed reduced performance related to THC levels. Posted on Preprints with The Lancet, the report assessed a dozen peer-reviewed studies and concluded that relying solely on blood THC to determine cannabis impairment in driving may be misleading. Out of the studies reviewed, ten reported no correlation between blood THC and various driving measures, while only two studies found a significant association, suggesting a more nuanced understanding of cannabis impairment is needed.

Study Finds Promising Reduction in Youth Cannabis Use – A recent study published in Pediatric Reports indicates a "significant decrease" in youth cannabis use from 2011 to 2021, despite the legalization of cannabis in more than a dozen states during that period. The research found that the percentage of high school students who reported ever trying cannabis fell from 39.9 percent in 2011 to 27.8 percent in 2021, while past-month use decreased from 23.1 percent to 15.8 percent. The analysis, based on data from the CDC’s Youth Risk Behavior Survey, also noted a decline in early cannabis use, with the proportion of adolescents trying cannabis before age 13 dropping from 8.1 percent to 4.9 percent.

Dentons Speaks

Chicago partner Amy Rubenstein and Pittsburgh shareholders Julie Vanneman and Chad Wissinger discuss the importance of an OSHA Cannabis Program taking place in Colorado and its impact on cannabis production facilities across the country in a Dentons Cannabis Insight: Why an OSHA Program in Colorado Matters to Cannabis Production Facilities Nationwide.

San Francisco cannabis partner Kelly Fair spoke at a USCC briefing titled Cannabis & the 2024 Election to discuss the upcoming DEA hearing and next steps for rescheduling.

Chicago cannabis partners Eric Berlin and Amy Rubenstein were keynote speakers at Illinois CPA Society’s Cannabis Industry Conference, where they presented on the current and near future legal landscape for cannabis and hemp and certain tax implications.

Dentons Cannabis Practice Leader Eric Berlin appeared on the podcast, The Dales Report, to discuss cannabis rescheduling.

Please click here for more information on the Dentons US Cannabis group.

Authored by associatesMalina Dumas, Lauren Estevez, and Jacob Raver.