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GM Everyone,
Greetings from MJBiz. Enjoy the headlines below.
A little less than a 6 minute read.
đ¸ The Tape
Chad Chronister Is Out For DEA Admin
The saga of President-elect Donald Trumpâs DEA nomination took a sharp turn when Floridaâs Hillsborough County Sheriff Chad Chronister withdrew from consideration just days after being named. Chronister, known for his progressive stance on marijuana policy, would have represented a significant pivot for the agency. His advocacy for cannabis decriminalization, citing it as a reflection of an âevolving society,â earned him applause from reform advocates but raised eyebrows among conservative lawmakers.
Chronisterâs unexpected withdrawal came amid mounting scrutiny over his record on COVID-related public safety enforcement. He cited the âgravityâ of the DEA role as the reason for stepping back, though political tensions surrounding his progressive policies likely played a role. His departure leaves a critical vacancy as the federal government navigates its most significant marijuana rescheduling process in decades.
Had he stayed, Chronister would have overseen efforts to reclassify cannabis from Schedule I to Schedule III under the Controlled Substances Actâa change that, while not legalizing marijuana, would narrow the gap between federal policy and the widespread state-level legalization efforts. His track record as a vocal supporter of decriminalization marked a stark contrast to the DEAâs historical resistance to reform, signaling a potential paradigm shift under his leadership.
Chronisterâs progressive approach to cannabis enforcement was evident in his 2020 push for Hillsborough County to treat possession of up to 20 grams of marijuana as a civil offense instead of a misdemeanor. In testimony before the county board, he emphasized the importance of âfair and equitable enforcementâ and argued that decriminalization would not only alleviate the burden on the criminal justice system but also provide an educational opportunity without creating lasting criminal records. Following the unanimous vote, Chronister celebrated the reform as a win for efficient law enforcement and community equity.
As stakeholders anxiously watch for Trumpâs next move, Chronisterâs withdrawal underscores the complexities of marijuana policy reform in the shifting political landscape. Whether his bold vision will inspire future nominees remains an open question. For now, the DEAâs path forward is as uncertain as ever.
đ Dog Walkers
Glass House Launches ATM
Glass House Brands Inc. is doubling down on its aggressive expansion strategy, leveraging record-breaking operational performance as a springboard for growth. With a 128% year-over-year surge in cannabis production and cultivation costs hitting a record low of $103 per pound, the company is capitalizing on its strong financial footing to fund Phase III expansion plans. The at-the-market (ATM) distribution program, detailed in the recently filed prospectus supplement, aims to raise up to $25 million, ensuring strategic flexibility in execution. With upgrades such as blackout curtains, CO2 systems, and nearly 11,000 lights pre-installed in Greenhouse 2, the company anticipates a transformative boost in production consistency and quality. Glass Houseâs disciplined timing on financing underscores a long-term focus on market dominance.
Rubicon Organics Secures $10M Facility
Rubicon Organics has just struck a financial power play, securing C$10 million in five-year credit facilities at a competitive 6.75% interest rate. The move allows the company to retire its looming US$8 million Green Island Debenture well ahead of its December 31 deadline, eliminating a ticking time bomb and replacing it with friendlier terms. By leveraging first-ranking security interests, Rubicon demonstrates fiscal discipline while keeping its balance sheet intact for future growth. CFO Janis Risbin hailed the deal as a "flexible liquidity boost," while Community Savings Credit Unionâs CEO Mike Schilling cheered their cannabis-friendly partnership. With a tidy 10-year amortization cushion, Rubicon is well-positioned to focus on its premium organic cannabis ambitions without breaking a financial sweat.
CEAD Makes Acquisition
CEA Industries is gearing up for a bold move, announcing a non-binding LOI to acquire a specialty retailer and manufacturer with 30+ locations and a treasure chest of trademarks. This isnât just any acquisitionâChairman and CEO Tony McDonald calls it a "profitable, high-demand industry opportunity." Translation? This Target has double-digit growth, cash flow in the black, and enough IP to make a lawyer blush. CEA plans to flex its balance sheet muscle, expanding the Target's footprint and white-label manufacturing game. But hold the confettiâthereâs a maze of due diligence, landlord consents, and financing hurdles to clear before a Q1 2025 close. Still, if they pull it off, this could be a growth rocket for shareholders. As McDonald teases, âStay tuned.â
đď¸ The News
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ALJ Hearing: Cannabis Rescheduling Updates and Key Takeaways | Trade to Black
What we covered:
â On our latest Trade To Black podcast, Host Shadd Dales & Anthony Varrell will break down the key takeaways from todayâs ALJ hearing on the rescheduling of cannabis.
The Drug Enforcement Administration (DEA) has officially begun its first hearing on the Biden administrationâs proposal to move cannabis from Schedule I to Schedule III of the Controlled Substances Act. While todayâs meeting is largely procedural, it sets the stage for more substantive hearings next year.
DEA clarified that this session focuses on legal and logistical issuesâno witness testimony was taken. The ultimate decision could bring significant regulatory changes. Moving cannabis to Schedule III would reduce restrictions but still maintain criminal prohibitions on manufacture, distribution, and possession, along with federal oversight under the CSA and the Federal Food, Drug, and Cosmetic Act.
So, whatâs the broader impact if cannabis is rescheduled? And will this decision be endorsed by the Trump administration?