In this week’s edition:

• Dentons Partner Eric Berlin appeared on The Dales Report to discuss the Trump Administration’s views towards rescheduling
• Senate Confirms Cannabis Critic as OMB Head
• Bill Filed To Maintain 280E Restrictions Even After Cannabis Rescheduling
• Hawai`i Seemingly Reverses Position On Cannabis Legalization
• Alabama Senator Introduces Bill To Ban Intoxicating Hemp Products
• Study Finds More Than Half of Beer Drinkers Willing to Try Cannabis Infused Drinks

Dentons Speaks

Dentons Partner Eric Berlin presented at CannaDataCon in Miami Beach. Eric presented on the panel topic “THC Drink Regulations: Who’s at the Helm?” Eric also appeared on The Dales Report to discuss the Trump Administration’s views toward rescheduling and, in particular, how President Trump could enact a ruling for cannabis rescheduling. (Eric’s portion begins at 9:50 and ends at 39:20.)

Dentons Partner Hannah King was a panelist at the Feb. 12 webinar, “Does 280E Apply? What the Cannabis Industry and IRS are Saying,” hosted by BGM. The panelists discussed the latest developments in cannabis taxation and the evolving implications of 280E. With new IRS guidance, legal challenges, and ongoing rescheduling efforts, this webinar explored what these changes mean for cannabis businesses and the industry.

Red Dye No. 3 is Now Banned in the US – The FDA has banned red dye No. 3, a cancer-causing artificial food dye, and calls are increasing by Scientists with the Center for Science in the Public Interest for FDA to review and ban red dye no. 40. Red dye No. 40 is another petroleum-derived artificial food dye that is currently deemed a healthier alternative. However, red dye No. 40 has been linked to accelerated immune system tumor growth in mice and has been found to contain a known carcinogen called benzene. So far, only California has put laws in place to ban red dye No. 40. Dentons has reviewed a sampling of Illinois labels and found that about half contained red dye No. 40 as the ingredient of choice to color their products. Other brands contained natural colorings such as using fruit and vegetable juice for color. In order to continue the industry's goal of providing safe, affordable access to cannabis, more brands should follow in the steps of companies using natural methods to dye their products.

Federal

Senate Confirms Cannabis Critic as OMB Head – In a party-line vote (54 to 47), the Senate confirmed Russell Vought as the Director of the Office of Management and Budget (OMB). Vought is reportedly an outspoken critic of cannabis legalization and has previously called the substance a "gateway drug." His confirmation is considered a setback for cannabis legalization advocates, as the OMB Director may be able to influence upcoming decisions related to cannabis policy, including budgetary proposals and the ongoing rescheduling of cannabis taking place at the Drug Enforcement Administration.

First Cannabis Bill Filed in New Congress Would Support Veterans – Rep. Greg Steube (R-FL) has introduced the first cannabis bill of the new congressional term, which is intended to protect military veterans from losing benefits for the use of state‑legal medical cannabis. The bill also would codify the ability of U.S. Department of Veterans Affairs (VA) doctors to discuss the risks and benefits of cannabis with patients. Steube has consistently filed similar bills since 2020. 

Bill Filed To Maintain 280E Restrictions Even After Cannabis Rescheduling – Sens. James Lankford (R-OK) and Pete Ricketts (R-NE) have introduced the "No Deductions for Marijuana Businesses Act," which would continue to prohibit the use of certain federal tax deductions by the cannabis industry—even if cannabis were rescheduled from Schedule I to Schedule III. Section 280E currently prevents those doing business in Schedule I and II substances (such as cannabis) from deducting common expenses like payroll and marketing on federal tax

House Financial Services Committee Discusses Cannabis Industry Banking Access – At a recent House Financial Services Committee hearing set to discuss debanking issues facing federally legal businesses, Rep. Warren Davidson (R-OH) expressed hope that Congress would soon pass a cannabis banking bill, arguing that current financial barriers for the cannabis industry constituted a "second tier" of prohibition. During the hearing, Davidson highlighted how cannabis businesses are preventing state-legal operators from accessing essential financial services. The issue has reportedly been a focus in various recent congressional hearings, with both parties acknowledging the need for reform.

Federal Appeals Court Dismisses Prison Sentence For Cannabis User’s Firearm Possession – The United States Court of Appeals for the Eighth Circuit has dismissed the three-year prison sentence of a person convicted for possessing a firearm while being an active cannabis user, ruling that the federal government's prohibition on gun ownership by drug users may be constitutional in certain cases, but not on a blanket basis, as was decided by the lower court here. Per the appellate panel, while disarmament (and related punishment) of drug users can be constitutional, it is not an automatic outcome. The Circuit Court remanded the case back to the lower court for an assessment of the law’s applicability, noting that further fact-finding was likely required.

State

CA – Gov. Gavin Newsom (D) announced that last year, California's Unified Cannabis Enforcement Task Force seized and destroyed over $254 million worth of unlicensed cannabis products, focusing on illegal cultivation, retail, and delivery services to enhance consumer safety. Key achievements included the removal of 2.2 million pieces of illegal packaging, the seizure of 154,000 pounds of illegal cannabis, the eradication of 236,000 illegal cannabis plants, and the arrests of 35 individuals.

FL – Florida Senator Joe Gruters (R) reintroduced a proposal allowing medical cannabis patients to grow up to two cannabis plants at home, without the previous provisions that restricted hemp-derived cannabinoids. The new bill, SB 456, would permit state-registered cannabis patients 21 and older to grow two plants for personal use after obtaining a certificate from the state Department of Agriculture and Consumer Services. Another new bill, SB 552, also introduced by introduced by Senator Gruters (R), aims to expand access to medical cannabis in Florida by adding new qualifying conditions, waiving fees for military veterans, allowing telehealth recommendations, and permitting out-of-state patients to participate in the program. The bill would also require the state Department of Health to establish procedures for issuing medical cannabis use registry identification cards to qualifying individuals. Meanwhile, Florida Governor Ron DeSantis (R) predicted that the latest cannabis legalization ballot initiative would face significant challenges in the state Supreme Court and likely be blocked from appearing before voters next year. He emphasized that such issues should not be included in the state Constitution and suggested that voters support legislative candidates aligned with their views on cannabis. 

HI – Less than 48 hours after Hawaii lawmakers seemed ready to legalize recreational cannabis, the state's House of Representatives unexpectedly delayed the measure until at least 2026 in a dramatic reversal. The bill, HB 1246, proposed legalizing personal cannabis use for adults 21 and over starting in 2026, establishing a regulatory framework, creating the Hawaii Cannabis and Hemp Office, and imposing a tax on cannabis sales.

IL – the state of Illinois recorded a record $2 billion in legal cannabis sales in 2024. The Illinois legislature is focusing efforts on cannabis as well, with new bills to include provisions that allow medical patients to purchase medical cannabis at any cannabis dispensary, consolidates and streamlines the licensing of transportation centers, provide for cannabis funds allocation to junior colleges and cannabis-related expungements. 

KY- Kentucky regulators published guidance on medical cannabis advertising rules including guidance for cannabis business websites and social media. Prohibited activities include paid solicitation of customers, advertising medical cannabis sales in any form (print, broadcast, or online media), and any signage/logos that would inform the public a cultivator, processor, or producer has medical cannabis at its location.

MA – Travis Ahern, Massachusetts's top cannabis regulator, spoke about his plans for his incoming role of executive director of the Cannabis Control Commission. Ahern stated his priority when he begins in March will be the governance documents, including a charter, for the commission. Meanwhile, because of the growing competition in the Massachusetts cannabis industry, individual operators continue to struggle with continuing business operations. The state has seen record-breaking sales in the cannabis industry, but some facilities are still at risk of closure. 

MI – Michigan Gov. Gretchen Whitmer (D) is proposing to end a policy exempting the cannabis industry from a wholesale tax applied to other products such as cigarettes and tobacco. Whitmer claims to bring in an additional $470 million by ending the policy.

MN – Minnesota state regulators will hold lotteries for cannabis retail and cultivation permits starting in May. The state’s cannabis regulatory agency will begin accepting cannabis business license applications on February 18th. In related news, Minnesota Governor Tim Walz is negotiating compacts with 10 of the state’s 11 tribal nations to allow them to license off-reservation cannabis businesses. The negotiations, directed by the 2023 law that legalized recreational cannabis in Minnesota, could give a large share of the new industry to tribal nations and businesses they license.

NV – Nevada Assemblymember Max Carter II plans to file legislation to allow kiosks for cannabis delivery at thirteen (13) nongaming hotels in Las Vegas. He also said the sites would have “minimal” cash available to cut down on the potential for robberies.

OR – Oregon regulators published a report on February 1, 2025, stating that the state is continuing to see an oversupply of cannabis. The report states that Oregon harvested 12.3 million pounds of cannabis in 2024, a four percent (4%) increase from 2021, but the demand met only fifty-seven percent (57%) of supply in 2024.

PA – Pennsylvania Governor Josh Shapiro has proposed legalizing recreational cannabis as part of his budget plan, with legalization effective from July 1 and retail sales starting in 2026. The plan includes investing $10 million from cannabis tax revenues into restorative justice programs and expunging criminal records for cannabis possession. While the Democratic-controlled House supports legalization, the Republican-controlled Senate remains opposed. A majority of Pennsylvanians support legalization, and the state is nearly surrounded by states that have already legalized cannabis.

TN – Two Democratic lawmakers in Tennessee have introduced bills to legalize recreational cannabis for adults. The proposal could generate millions in state revenue, with a 15% tax on cannabis sales. If passed, adults over 21 could possess up to 60 grams of cannabis flower and 15 grams of concentrate, and grow up to 12 plants at home. The bill includes provisions for expunging past cannabis convictions and releasing individuals jailed for cannabis offenses. A significant majority of Tennesseans support legalization, with strong bipartisan backing.

VA – Both chambers of Virginia’s legislature have passed bills to legalize and regulate recreational cannabis sales. The House approved HB 2485, and the Senate approved SB 970. Governor Glenn Youngkin has indicated he plans to veto the legislation, as he did with similar bills previously. Use, possession, and limited cultivation of cannabis by adults are already legal in Virginia, but retail sales remain unregulated. The illicit cannabis market in Virginia is estimated to be worth nearly $3 billion. The proposed legislation includes detailed regulations for retail sales, taxation, licensing, and cultivation as well as provisions for an equity-focused microbusiness program and the allocation of tax revenue to support various social programs.

Hemp

Alabama Senator Introduces Bill To Ban Intoxicating Hemp Products – Alabama Senator Tim Melson has introduced a bill to ban hemp-derived THC products, such as delta-8, delta-9 and delta-10, classifying them as Schedule I controlled substances. If passed, the bill would go into effect October 1. Medical cannabis was legalized in 2021 in Alabama. Recreational cannabis remains illegal, with strict penalties for possession. If passed, Alabama will join California, Colorado, and New York (among others) as states that have banned intoxicating hemp products.

Delaware Creates Workgroup Focused on Regulating Hemp Products – Delaware officials are addressing the unregulated sale of intoxicating hemp products with a new task force. With Delaware’s legal cannabis industry set to launch sales this spring and an influx of complaints about intoxicating hemp products, the state has cited an increased need for regulations. The new state workgroup will focus on developing a regulatory framework for these products that includes age restrictions, product testing, and licensing. The task force will also include representatives from the Department of Justice, the Office of the Marijuana Commissioner, the Department of Agriculture and the Division of Forensic Science.

Maine Working Group Recommends Age Limits for Hemp-Derived THC Products – Maine's Department of Agriculture Conservation and Forestry convened a working group which recommends setting an age limit of 21 years old for purchasing intoxicating hemp products in addition to placing caps on the amount of THC contained in hemp beverages to 5 milligrams per container. The group also wants to prohibit copycat packaging that give the appearance of non-THC products. The Department issued a letter stating that this lack of regulation is a threat to public health and safety as well as the viability of Maine's hemp industry.

Missouri Legislature Pushes Bill Regulating Hemp-Derived THC Beverages – Two bills were passed in the House and Senate committees that allow for hemp-THC seltzers to be sold on store shelves while banning hemp edibles and vapes from being sold outside of cannabis dispensaries. Both bills require retailers to obtain a license to sell hemp-THC beverages, but a key difference is which state agency is tasked with issuing and regulating the licenses. The Senate Bill puts the job in the hands of the Division of Alcohol and Tobacco Control, which already regulates liquor retailers, distributors, and manufacturers. Meanwhile, the House Bill will task the Missouri Department of Health and Senior Services with the job, an agency which already houses the state’s cannabis regulating agency.

Tennessee Lawmakers Push Two Measures to Restrict Intoxicating Hemp Sales – Rep. Ed Butler (R) proposed a bill (HB 1148) that would ban smokable hemp flower products, including TCHa flower, which produce similar effects to cannabis when heated. This bill comes in response to these products being widely available at common retail outlets and marketed to children. Opponents argue that this would devastate the industry financially and push consumers to the black market. Another bill (HB 1376) proposed by Sen. Richard Briggs (R) would make the Tennessee Alcoholic Beverage Commission the designated regulatory authority over intoxicating hemp sales.

International

Austria – In Austria, smokeable hemp flowers containing up to 0.3% THC are now subject to a 34% tobacco tax, pursuant to a ruling by the Austrian Supreme Administrative Court. These products must also now be sold by licensed tobacco retailers. The decision does not affect the tax or sale of other ingestible or topical hemp or CBD products, which continue to be sold in health shops, pharmacies and online. All products must continue to be compliant with the THC threshold and labeling and packaging requirements.

Bahamas – The Bahamas Cannabis Authority will begin accepting licensing applications for cannabis operators by mid-2025, according to Bahamas Attorney General Ryan Pinder. Ownership requirements for cultivation, retail, transport or religious use licenses are restricted to 100% Bahamian owned legal entities, whereas a minimum 30% Bahamian ownership is required for analytical testing, manufacturing and research licenses. 

Czech Republic – The Czech parliament is due to debate a fully regulated adult-use cannabis market in 2025. This comes after an amendment was submitted to a November 2024 approved draft bill for self-cultivation of cannabis. The bill proposes to legalize growing up to three plants, including possession of 50g of cannabis flower at home and 25g in public. Although a separate bill to legalize and regulate adult-use cannabis has stalled, this amendment will at least begin the debate of regulating adult‑use in Czech Republic. No date has yet been set.

World Health Organization's critical review of coca leaf – The WHO’s Expert Committee on Drug Dependence (“ECDD”) will conduct its first critical review of coca leaf in 2025. It is currently a Schedule I substance under the UN’s 1961 Single Convention on Narcotic Drugs. Possible recommendations include that coca leaf remain in Schedule I, be rescheduled to Schedule II, a less restrictive category, or be removed from the treaty altogether. The ECDD’s recommendation will then be voted on at the UN’s Commission on Narcotic Drugs. The request was submitted in 2023 by Bolivia.

Business

Study Finds More Than Half of Beer Drinkers Willing to Try Cannabis-Infused Drinks – The study, published in the British Food Journal, found that 53-56 percent of people who identify as beer drinkers expressed openness to trying cannabis beverages, “with age, product knowledge and past purchasing behaviors correlating with this response.” Respondents were slightly more likely to say they’re willing to try THC‑infused drinks (56 percent) over CBD-infused beverages (53 percent). Fifty-seven percent of beer drinkers surveyed reported using cannabis for recreational purposes in the last year.

DoorDash Launches Delivery of Hemp-Derived THC and CBD Products – Customers in markets where hemp-derived products are available can now order hemp‑derived THC and CBD products from vendors on the DoorDash platform. The company reportedly requires that all merchants selling hemp-derived products verify compliance with federal and state legal limits. Merchants are expected to have Certificates of Analysis for each product SKU, confirming THC content remains within legal limits.

New York Regulators Launch Directory to Connect Industry to Banks – The New York Office of Cannabis Management established a Cannabis Banking Directory, which currently lists nine financial institutions that regulators say are servicing cannabis businesses and are open to accepting new clients as the New York market expands.

Cannabis Industry Faces Debt Reckoning Without Bankruptcy Help – According to Beau Whitney, chief economist at Whitney Economics, “[u]nless there is federal intervention, through reform, then the industry is on the precipice of collapse and large firms from outside the cannabis industry will be positioned to take over, for pennies on the dollar.” A survey completed by Whitney found that only 27% of operators in the cannabis industry made a profit in 2024, down from 42% in 2022.

Safe Harbor Financial Announces Temporary Pause in Principal Payments – Under an agreement with Partner Colorado Credit Union, Safe Harbor announced that the company will “temporary pause” principal payments in February and March related to a senior secured promissory note as the parties negotiate a new deal. “This Letter Agreement represents PCCU’s commitment to work with us as we develop new solutions to capitalize on, scale and expand our service offerings,” said Terry Mendez, co-CEO of Safe Harbor Financial. “PCCU’s willingness to engage in these discussions reflects our longstanding relationship. The temporary pause in principal payments is expected to improve our liquidity by approximately $510,000.”

Woman’s Health May be Key to Reviving Cannabis Industry – Many U.S. states recognize cannabis for treating various medical conditions, but women's health issues, such as endometriosis and severe menstrual pain, are often excluded from medical cannabis programs. Chanda Macias, CEO of Women Grow, believes focusing on these unmet needs could help revitalize the industry, which is facing stagnation. Women Grow, a Washington, D.C.-based organization whose goal is to empower women in the cannabis industry through networking opportunities, mentoring, and business support, plans to address these challenges, along with the difficulties women entrepreneurs face in securing capital and equal pay in the cannabis field. The organization will also explore innovative funding models and career development at its upcoming summit, aiming to empower women in the cannabis industry.

Anti-Legalization Group Vows to Go on ‘Offense’ – Kevin Sabet, president of Smart Approaches to Marijuana (SAM), announced a new offensive against cannabis legalization, vowing to push back against federal and state efforts to ease cannabis restrictions. SAM is actively working to reverse state-level legalization in Montana and prevent federal bills like the SAFER Banking Act, which would ease financial access for cannabis businesses. Sabet also criticized the potential rescheduling of cannabis and pledged to continue fighting the proliferation of hemp-derived intoxicants, such as delta‑8 THC. SAM’s broader agenda includes opposing the legalization of psychedelics and arguing that the cannabis industry promotes "addiction for profit."

Medicine

Study Finds No Significant Increase in Emergency Department Visits Following Arrival of Cannabis Retailers – Researchers wanted to know if opening legal cannabis stores in Ontario changed the number of emergency room visits related to cannabis, alcohol, or opioids. Since Ontario used a lottery system to decide where stores would open, this created a "natural experiment" to measure cause and effect. After analyzing health data from over 11 million adults across several years, they found that the presence of cannabis retailers didn’t significantly increase or decrease ER visits for any of these substances. The study suggests that simply opening cannabis shops doesn't necessarily lead to more health emergencies—but ongoing monitoring is still a good idea.

Study Finds that Opioid Prescriptions Drop in States That Legalize Cannabis – study found that states where cannabis is legal see a drop in opioid prescriptions. Researchers believe this suggests that some pain patients are choosing cannabis over traditional painkillers, which could help prevent opioid addiction and overdoses. The biggest decline in opioid prescriptions happened after recreational cannabis dispensaries opened, with a 13% reduction. The study also noted a slight increase in non-opioid pain medication use but not enough to fully replace opioids. While the findings hint at cannabis being a potential alternative for pain management, researchers say more studies are needed to understand the long-term effects.

Psychedelics

NYT Article Exposes “Deliberate Misinformation and Fear-Mongering” By Psymposia, An Advocacy Group that Opposes Commercialized Psychedelics – A promising psychedelic treatment for PTSD was recently rejected by the FDA, and an activist group called Psymposia may have played a key role in its downfall. The therapy, which combined MDMA with talk therapy, showed strong results in clinical trials, but Psymposia raised concerns about misconduct and abuse within the research. Although the group provided little concrete evidence, their claims influenced the FDA advisory panel’s decision, leading to a wave of backlash and uncertainty in the psychedelic medicine field. Now, Lykos Therapeutics—and its nonprofit parent, the Multidisciplinary Association for Psychedelic Studies (MAPS)—the company behind the treatment, faces delays, potential new trials, and growing fears that future psychedelic therapies may face similar opposition.

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

Authored by associates Malina Dumas, Lauren Estevez, Seena Forouzan, Kristina Grimaldi, Blair Johnson, Jacob Raver, Victoria Mooncotch, and Jessica Steinberg.