🌊PA Is In Play

Author

Anthony Varrell
January 15, 2025

GM Everyone,

To the surprise of many, sentiment in the cannabis sphere was positive after the ALJ hearing was delayed, suspending proceedings for at least 90 days. The bigger question is whether we need the hearing at all, given that a new administration—and presumably a new DEA head—arrives next week. We could see a win, but relying on politically driven decisions to go our way isn’t exactly our forte.

Look out for the C word dropping during the Bondi Hearing.

A little more than a 6 minute read.

💸 The Tape

PA Is In Play

Pennsylvania is gearing up for a potentially transformative legislative session on cannabis reform, and Sen. Dan Laughlin (R) is steering the conversation. As chair of the Senate Law and Justice Committee—and a longtime legalization advocate—Laughlin sees an opportunity to make Pennsylvania the 25th state to embrace adult-use marijuana. His vision? A system that allows those 21 and older to partake while maintaining a framework that avoids an anything-goes atmosphere.

Laughlin’s committee may become the epicenter of the debate, reflecting a surge of interest among lawmakers who used to shy away from legalization. Still, there’s no shortage of competing proposals, including a minimalist decriminalization bill, a bolder initiative to sell cannabis through a state-run model, and a measure to protect medical patients’ firearm rights. Given how New York and New Jersey have launched adult-use markets, Pennsylvania risks watching sales—and tax dollars—cross state lines if it doesn’t follow suit.

For multi-state operators already in Pennsylvania—like Trulieve (21 dispensaries), Cresco Labs (15 dispensaries), Jushi (17 dispensaries), and Green Thumb Industries (18 dispensaries)—adult-use legalization could be a game-changer. Each company already has a medical footprint in the state, but switching from patient-based sales to an expanded adult-use market would potentially spur significant top-line growth. Medical operators who’ve built brand loyalty and strong retail networks stand to benefit the most, leveraging existing dispensaries to capture both medical and recreational demand. In addition, operating efficiencies might improve as they spread overhead across a broader customer base.

Of course, the devil is in the details. While Laughlin and other lawmakers see the revenue upside, they also acknowledge the importance of guardrails—ensuring, for instance, that non-users aren’t negatively impacted and that Pennsylvania has a robust regulatory framework.

Despite uncertainties, Laughlin’s optimism suggests that support for legalization is building among even the most cautious politicians. Between fears of missing out on tax revenue and a changing public mindset, Pennsylvania looks poised to join the adult-use club sooner rather than later. For the state’s major cannabis players, that could translate into a meaningful—upgrade to their local business strategy.

📈 Dog Walkers

Ascend Closes $15M Note Offering

Ascend Wellness is going full throttle with its latest capital raise, closing a $15 million private placement of 12.75% Senior Secured Notes. With Seaport Global Securities at the helm, Ascend plans to deploy these proceeds to spur growth initiatives and maintain its market edge. A robust first lien on nearly all the Company’s assets sweetens the security for investors, leaving Ascend poised to ascend further in the ever-evolving cannabis world.

Pot Daddy Is Back

John Morgan, Morgan & Morgan CEO and marijuana crusader, blames Gov. Ron DeSantis—and roughly $50 million in taxpayer-funded ads—for the failure of Amendment 3 this past November. The measure scored 56% when 60% was needed, but Morgan insists it would’ve passed if not for what he calls a “taxpayer-funded sabotage.” Meanwhile, President-elect Donald Trump’s pro-marijuana stance has the cannabis crowd feeling bullish on the future. The Florida hemp industry and law enforcement also drew Morgan’s ire, accused of peddling “lies” to sink the amendment.

📺 YouTube

DEA Judge Cancels Rescheduling for Cannabis | Trade to Black

What we covered:

✅ On Trade of Black, host Shadd Dales and Anthony Varrell discuss Judge John Mulrooney’s decision to cancel next weeks tALJ hearing for the rescheduling of cannabis and what this means for the cannabis industry.

Joining us as well is Aras Azadian, CEO of Avicanna, who will share his insights on the delay and the potential rescheduling of cannabis. Azadian will explain the key initiatives cannabis medical research companies must prepare for if and when rescheduling occurs.

As research focusing on medical cannabis gains traction, we’re diving deeper into Avicanna Inc. (TSX: AVCN), a leader in cannabis medical research. We’ll ask Azadian his thoughts on the rescheduling delay, how Avicanna has positioned its pipeline compared to other companies, and the platform MyMedi.ca, designed to enhance the patient journey.