Six months have passed since the Department of Health and Human Services (HHS) formally recommended the reclassification of cannabis under the Controlled Substance Act (CSA). Still, there is no word as to when or if the U.S. Drug Enforcement Agency (DEA) will carry out the department's request and classify cannabis as a Schedule III substance.

In the meantime, the brave and bold who have committed to protecting our country have poured their voices into a single letter pushing the Biden administration to "expeditiously" ease federal cannabis restrictions. 

"The men and women who served in the U.S. Armed Forces often face difficult physical and mental challenges upon returning home," a letter signed by the Minority Veterans of America, American Legion and several other veterans' advocacy groups reads.

"As such, we hope that in treating the wounds of war — both visible and invisible — that our servicemembers and veterans would have access to the widest array of possible treatments."

Veterans across the nation have been vocal about the need to reclassify and legalize adult-use cannabis. 

More than 80% of veterans surveyed by the American Legion said they support medical cannabis research and would like to have cannabis as a federally legal treatment.

Lawmakers from both parties and chambers have responded to these calls for study and legalization by introducing several bills related to veterans and cannabis over the last year. However, most die on the congressional floor and fall short of being signed into law.

Despite the sluggish pace of cannabis policy reform, veterans continue to fight and their efforts do not go unnoticed or unappreciated by those in the legal cannabis industry. Veterans, like most Americans, overwhelmingly support the federal decriminalization and eventual legalization of cannabis.

For whatever reason, the DEA has made it clear that letters, public statements and other diplomatic efforts are meaningless to them. Instead, they move forward on an unknown timeline that they feel is justified. In reality, it does nothing more than delay the will of the people and many of the lawmakers supposedly representing them.

Earnings season is underway

Fourth quarter earnings season is ready to begin and large operators like GTI, Trulieve and Verano ( VRNOF ) are leading the charge.

Heading into earnings season, we were under the belief that consensus estimates were incorrectly on the downside, as data from Headset and individual states painted a different picture. Those that executed well throughout the fourth quarter were underestimated and look to over deliver (UPOD) throughout what appears to be a better than expected earnings season. As a result, the stronger companies could be poised for a back-to-back quarterly beat, a welcome progression. 

Green Thumb Industries ( GTBIF ) is a prime example of an industry leader being underestimated and over-delivering during this earnings season. The company's strategic capital allocation, efficient management team and commitment to focusing on the fundamentals of business growth have led to a solid quarter.

We suspect other public companies will be digesting GTI's strategy and communication and will adopt what they can in their earnings calls, with many more to go this earnings season. 

As earnings season unfolds, it will be fun to dig through additional reports and hear discussions about wholesale pricing dynamics, capex strategies, continued opex optimization, tax management and improving growth rates.

Legalisierung! Germany passes landmark adult-use cannabis law

Legalisierung or legalization, as it is known in English, is coming to Germany.

Earlier this month, lawmakers in the western European nation approved a hotly contested bill that paves the way for controlled consumption beginning April 1. 

Introduced by Chancellor Olaf Scholz's government, the measure allows adults to possess 25 grams of cannabis for use in public and grow up to three plants in the comfort of their homes. Also, cultivation in nonprofit cannabis clubs with fewer than 500 members will be allowed beginning July 1.

Health Minister Karl Lauterbach believes the measure will curb the nation's black market, tackle drug-related crime and prevent the sale of contaminated products.

"The situation that we are currently in is in no way acceptable," he explained.

"We have to face the problems and the approach we are taking here is a good approach."

Many had hoped that Germany would enter the global adult-use market at the beginning of the year. While the passing of this measure isn't as exciting as many had previously hoped, it is still a significant step in the right direction as the global war on drugs continues to erode.

As April nears, it will be interesting to see how the nation's adult-use program grows and Germans begin to experience the benefits derived through private and public businesses.

NYS adult-use market stumbles out of the gate, but it can still win the race

New York State has taken California's place in the legal cannabis market, but it's not in the way that many had hoped.

The Empire State has snatched California's title as the most underperforming adult-use market in the nation. When the Marihuana Regulation & Taxation Act (MRTA) was signed into law in 2021 and the Conditional Adult-Use Retail Dispensary (CAURD) program was formed, many had high hopes for the state's adult-use market could produce, including millions, in tax revenue that could be used to combat the War on Drugs.

A few years later, the state is home to a worrisome number of illicit cannabis storefronts, people of color looking to break into the business are struggling due to severe financial hurdles, and a recent report indicated that legal cannabis providers in California are funneling product to New York.

Now, members of the Office of Cannabis Management (OCM), local politicians, entrepreneurs and everyday New York residents are trying to find solutions to these pressing issues.

"It's not that we know the perfect way to design or implement a cannabis market," OCM Executive Director Chris Alexander said. "Who do we turn to to know the way to do this? It's just us."

The New York adult-use market is still far from reaching its full potential, but there is room for optimism. The number of licensed retailers across the state is growing, wholesale supply in the market is improving and there are new efforts to crack down on the illicit market. 

Sure, New York isn't off to the start that it had hoped, but it can still get on the right legal cannabis track and see success in the future.