💸 The Tape

Op-Ed by Alexander Mootz - President - Complete Ag Solutions

Section 781 of Public Law 119-37, enacted November 12, 2025, amended the federal hemp definition in 7 U.S.C. §1639o. It replaced the delta-9 THC standard with total THC including THCA at 0.3 percent dry weight, and it added exclusions: intermediate and final hemp-derived cannabinoid products containing cannabinoids the plant cannot naturally produce; cannabinoids the plant can produce but that were synthesized or manufactured outside the plant; intermediate products exceeding 0.3 percent combined total THC and similar-effect cannabinoids; final products exceeding 0.4 milligrams per container; and viable seeds from plants over the threshold.

Public Law 119-103, signed September 2, 2026, delayed most of that rewrite to December 11, 2026. It left only the “not capable of being naturally produced” exclusions live on November 12.

Rep. Morgan Griffith’s Hemp Enforcement, Modernization, and Protection Act, H.R. 7212, does not amend, repeal, or delay Section 721. Its carve-out for cultivated plants simply references subtitle G of the Agricultural Marketing Act, meaning whatever 1639o says on December 11 governs the farm gate. Griffith’s bill regulates finished products downstream under the FD&C Act.

Within that downstream framework, the bill’s definition of “cannabinoid” in section (tt) is source-neutral: “a chemical, regardless of its source,” and subclause (B) adds “regardless of origin or method of production.” Delta-8 is listed by name as subclass (v). Delta-9 is subclass (iv). The prohibited product list in section (xx)(1)(G) bans cannabinoids not naturally found in Cannabis sativa and only creatable synthetically ie. HHC and THC-O are the examples plus anything produced by genetic engineering or “other manipulation of the plant.”

Isomerization of extracted cannabinoids into delta-8 or delta-9 is a chemical reaction on a molecule outside the plant. It is not genetic engineering. It is not plant manipulation. Under Griffith’s text, the conversion product is a regulated cannabinoid hemp product subject to milligram caps, labeling, and testing.....but legal. The FDA gets 3 years to tighten that. If it doesn’t, defaults are 5 milligrams per serving and 30 per package for intoxicating products, 10 and 50 for oral non-intoxicating.

Section 781 says that same molecule lost hemp status the moment it was synthesized outside the plant. Griffith’s bill says it’s a hemp product under FDA jurisdiction. The statutes contradict each other on the identical molecule, and Griffith’s bill contains no supremacy clause or cross-reference resolving it.

The structural hole is this: after December 11, the only raw material a grower can legally produce is non-intoxicating plant-extracted cannabinoids CBD, CBG, CBC, and other non-THC-class compounds. That material is the feedstock for conversion. Griffith’s framework doesn’t merely tolerate that pipeline — it regulates it, legitimizes it, and gives it a federal stamp. Growers supplying biomass for extraction get locked out of the downstream value chain, while converters with reactors inherit the legal market.

The Quiet Ban

Section 781 doesn’t say growers can’t produce CBD, CBG, or CBC. It doesn’t need to. By defining hemp derived cannabinoid products to exclude anything synthesized outside the plant and by setting the intermediate product threshold at 0.3 percent combined total THC plus similar effect cannabinoids, it makes the legal production of those non-intoxicating cannabinoids commercially impossible at scale. A grower harvesting biomass above that threshold can’t move it and risks criminal charges. A processor extracting CBD from that biomass produces an intermediate product that fails the same test. The statute never uses the word ban it just defines the product out of existence. That’s not regulation. That’s elimination by definition.

No Pathway to Medical or Recreational Markets

H.R. 7212 contains no language authorizing sales to DEA-licensed entities, DEA registrants, or Schedule I holders. It has no provision for hemp derived cannabinoid products entering state legal medical cannabis programs, recreational dispensaries, or any controlled substance channel. The bill’s universe is strictly FDA consumer regulation: labeling, testing, facility registration, a nationwide minimum purchase age of 21, and content caps. The definition of “cannabinoid hemp product” expressly excludes anything that is an FDA approved drug under FD&C Act section 505 — Epidiolex’s lane — but it builds no bridge from hemp into DEA-controlled medical or adult-use markets. Growers locked out of the conversion pipeline by Section 781 get no alternative downstream outlet under Griffith’s framework. The bill regulates a market it simultaneously makes unreachable for the people who grow the plant.

📈 Dog Walkers

$SNDL ( ▲ 2.36% ) Reports Mixed Q3

SNDL’s third quarter reads like two different companies. The one in the press release headline has record free cash flow of $20.0 million, record gross margins in both retail segments, zero debt and $617.8 million in cash and investments. The one in the footnotes just took a $52 million goodwill impairment on its cannabis production business and is launching a strategic review of the segment, which is corporate language for “we may sell it.”

Net revenue fell 2.5% to $238.0 million, with same-store sales down 6% in liquor and 3.8% in cannabis retail. Cannabis Operations, the cultivation and brand arm, dropped 27.7% to $27.0 million at a negative 6% gross margin. Adjusted EBITDA slipped to $15.8 million from $18.1 million. The net loss of $50.8 million is almost entirely the write-down.

The real story is capital allocation. SNDL deployed $60.8 million into U.S. strategic investments in the quarter, completed the Parallel restructuring that wiped out roughly US$842 million of debt, and pushed its indirect stake in the Florida medical operator from 67% to 92%. It’s funding a new Gainesville cultivation facility through SunStream and says it is “exploring direct ownership and consolidation” of qualifying U.S. medical operations. With state-licensed medical cannabis now in Schedule III, that language is the whole thesis: SNDL wants to be the Nasdaq-listed vehicle that consolidates Florida medical assets while adult-use remains stuck.

Meanwhile it’s shrinking the share count. 23.1 million shares repurchased year-to-date, and a proposed C$50 million substantial issuer bid at up to C$1.92 that could retire more than 10% of the float. Ontario regulators are also close to letting Value Buds resume franchise growth after a year-long freeze.

Zach George says the quarter shows “improvement in SNDL’s underlying financial performance.” What it really shows is a company with a billion dollars of book value, no debt and a very clear idea of which border it wants to be on.

📺 Trade To Black

Earnings Season Kicks Off With SNDL's Mixed Quarter | TTB Presented by Flowhub

• SNDL kicks off earnings season with Q3 revenue of $238.0M, in line with ATB, and adjusted EBITDA of $15.8M, well ahead of the $11.3M forecast. Same-store sales fell in both cannabis and liquor retail, gross margin slipped to 24.3%, and the cannabis operations segment is now under strategic review.

• Balance sheet remains the story: $141.1M in cash, zero debt, roughly 2% of shares repurchased, and a proposed C$50M Substantial Issuer Bid on deck.

• ATB’s Fred Gomes makes the case that institutional money is returning to Canadian cannabis at 3.5x to 6x EBITDA, citing new positions in Village Farms and Auxly, the Decibel tender, sector buybacks, and the Curaleaf bid for Aurora with a possible Organigram counter.

• Michael Bronstein covers the DEA judge’s refusal to reopen the rescheduling hearing, with briefs due October 29 and November 5, plus the indictment of Virginia Sen. Louise Lucas. The charges remain allegations.