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Cannabis Musings moved to Substack on May 1, 2023:
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Friends – happy new year! It’s that time when we engage in the completely meshuga exercise of predicting what’s going to happen in the cannabis industry in the coming year. But first, a quick word from our sponsor.


As many of you know, after 24 years of being a lawyer, this past summer I left the practice of law and launched Hauser Advisory. I realized that there was a better way to apply the skills I’ve built over two decades in deals and capital markets, as well as the broad and deep national network of relationships and resources I’ve developed in this industry.


Through this platform, I’m advising cannabis companies on macro strategy and major transactions – M&A, investments and loans, restructuring and workout, and the like – as well as helping investors and companies understand and navigate this ever-evolving industry. My goal is to not only guide the process and help the management team make informed decisions, but also to act as a bridge with the outside professionals (lawyers, bankers, accountants), translating what they’re saying and making those relationships more efficient (saving management’s time and money).


In just a few months, I’ve already found that this role allows me to be even more useful to clients and partners, whether as a consultant, board member, or part-time employee. I’m able to give even more direct and practical advice and recommendations, develop connections, and work closely with teams to understand business needs. So, if you could use my help, let’s find a time to talk.


One thing that hasn’t changed is the somewhat regular production of these Cannabis Musings. This year, we’re going to continue to discuss farpotshket goings on in the industry and also consider some of the lessons that I’ve learned along the way.


With that, on to my thoughts about things to watch for in 2023.


  • Federal – I for sure don’t know. I mean, what’s the point anymore of even trying to guess what the President, Congress, the DEA, and the FDA are going to do? (Though, unfortunately, I’ve been correct about SAFE for five years going.) Maybe scapulimancy or haruspication will result in better predictions here. That being said, I do expect we’ll see something interesting when the 2018 Farm Bill (which descheduled hemp) comes up for renewal this year. If the draft Hemp Advancement Act filed by Rep. Chellie Pingree (D-ME) last February has any legs, I’m guessing that the hemp-derived THC (e.g., Delta-8) “loophole” (I put that in quotes because I don’t think the law allows for these products (no loophole), but that’s not legal advice and I recognize that many disagree with this take) will be finally be fixed.

  • States – I imagine that the industry will continue its slow and steady progress opening up markets in the states. I think one interesting trend to follow will be what states do about unlicensed retail sales of hemp-derived THC products – I’m guessing we’ll see more states ban them, even before Congress does something about it (if at all). Also, I'm guessing that Minnesota will fix whatever the heck happened (or didn’t happen) there last year regarding THC-infused edibles.

  • Courts – Related to the states, I think this will finally be the year when the industry gets serious about the question of interstate commerce. Why? Because it won’t have a choice. The various court cases challenging licensing residency requirements have just been the appetizer to the main course that is the recently-filed Oregon case challenging head-on that state’s ban on shipping cannabis products across state lines. I imagine the case will take a long time to make its way through the courts (including appeals), and the State of Oregon will fight hard, but I’ve always been of the mind (not a legal opinion) that these state bans are very likely unconstitutional. I just never expected the challenge to start this soon.

  • Capital – Without any sort of real catalyst to change things, the pain that is cannabis capital markets will likely continue unabated in 2023. Debt will remain expensive and equity will remain nearly non-existent for most companies as investors stay away from the space. I also think we’re likely to see more companies converting their debt into equity (ala Flower One and TerrAscend) in order to reduce leverage, as well as expensive public stock issuances at low price levels (ala Glass House and Agrify) in order to raise much-needed cash.

  • Exchanges – I’ve noticed recently some chatter about whether the Toronto Stock Exchange (TSE) could allow US cannabis companies to list for trading, stemming presumably from the TSE’s apparent lack of opposition (to date) to Canopy’s announced deal to finally close on its acquisition of Acreage, Wana, and Jetty (which we talked about extensively back in October). The thought is that, if the TSE will allow Canopy to remain listed even though it'll post-closing own US-based plant-touching assets, it will certainly allow other US plant-touching companies to list. I personally think there’s a subtle, yet material, business difference (although somewhat illogical) between not delisting Canopy and affirmatively taking on a new listing. That being said, we should all watch how this plays out this year.

  • Mishmash – The FDA will still not issue any regulations or guidance on CBD ingestibles and supplements (keeping my CBD knish truck project on continued hold). Brand collaborations with key prominent celebrities will finally gain real traction as the industry better understands how to market them (after years of many false starts).

Finally, on another personal note, I’m excited to share that I’m now an Adjunct Professor at Northwestern Law (my alma mater) and will be co-teaching a class on cannabis law and policy with some good friends as part of the school’s San Francisco Immersion Program. You won’t be able to take the class unless you’re a law student (a fate I recommend you avoid at all costs), but you can enjoy the Spotify playlist that we’ve created for the syllabus.


Be seeing you!


© 2023 Marc Hauser and Hauser Advisory. None of the foregoing is legal, investment, or any other sort of advice, and it may not be relied upon in any manner, shape, or form. Subscribe to Cannabis Musings at hauseradvisory.com.



Friends – it’s a tradition of these Cannabis Musings to look back on my predictions for the year and see how I did. With that, I present to you a recap in sonnet form (with apologies to Shakespeare).





The Senate did not help the industry

By making it much cheaper to go bank.

The feds don’t want to have it be easy

And thus, the cannabis stocks they did tank.

The M & A market slowed to a crawl

As capital continued its retreat.

Lo multiples and profits did appall,

So deal makers signaled their defeat.

Hemp, oh hemp, what can we even say?

You’re now used to produce a mild high.

Oh when will we hear from the FDA?

The states, they’re not just idly standing by.

Interstate limitations took a hit.

My lawyer job I did so fin’ly quit.


It was a very challenging year for the industry all around, meaning that my predictions for a lot of pain (á la Clubber Lang) were unfortunately generally correct. Next week we’ll take a look at the year ahead, and start to dig into some of the lessons we’ve all learned.


Thank you to all of my readers for sticking with Cannabis Musings over the past years and across platforms. I truly appreciate the dialogue. And if your interest in the cannabis industry is growing or reorganizing, or you would like to share your own ode to cannabis, drop me a line and let’s see if I can help with creative solutions, cost-saving measures, and doggerel.


© 2022 Marc Hauser and Hauser Advisory.None of the foregoing is legal, investment, or any other sort of advice, and it may not be relied upon in any manner, shape, or form.Subscribe to Cannabis Musings at hauseradvisory.com.


Friends – just a quick note about the SAFE Banking Act. Long-time readers of these Cannabis Musings know that I’ve been a deep pessimist for years about the likelihood of its passage. I’ve said time and again, as recently as about a week ago, that the entire state-legal cannabis industry exists as a matter of grace of the Federal government. Indeed, the Department of Justice could change its mind tomorrow and shut the entire thing down, but so far it hasn’t for somewhat vague-ish but kinda rational reasons, and that’s unlikely to change any time soon (not legal advice!).


However, just because the Federal government is allowing a multi-billion-dollar industry to thrive (okay, maybe that’s the wrong word given the industry’s current struggles) doesn’t mean that it has to, or is going to, make life easy. To date, it seems to me like the unstated message has been “you get what you get and you don’t get upset, so don’t be a schnorrer.” I’m reminded of this fact as I’ve followed the recent chatter and breathless expectations about the SAFE Banking Act being added to the National Defense Authorization Act by the Senate in order to get it passed, and watched the industry’s deflation in real time once news broke that, once again, Senate Minority Leader Mitch McConnell is opposed to adding SAFE to the NADA.


Now, there’s plenty of blame to go around for SAFE still not being passed by the Senate. In my opinion, this is a bipartisan failure. And who knows – maybe SAFE will still be introduced and pass on a standalone basis during the lame duck session. My point, however, is that, anytime we think that something might happen at the Federal level that might benefit the cannabis industry, we should go back and remind ourselves of the Peanuts trope of Lucy repeatedly convincing Charlie Brown to try to kick the football.


A larger question still remains for me about whether SAFE is really the prize that the cannabis industry wants (or needs). Years ago, I heard former Attorney General James M. Cole (the author of the “Cole Memorandum”) ask the same question about SAFE, so I can’t really take credit for this thought, but his theory was, if Congress were to actually pass SAFE, then the chances of Congress doing anything else for the cannabis industry for a long time would drop significantly. I particularly agree with this realpolitik perspective on Congress and cannabis, and I think it’s still mostly true, although certainly public opinion has changed in the years since he made that comment, and cannabis is much more in the political discussion. Nonetheless, I’m still of the opinion that SAFE doesn’t really do that much, and the industry should be more focused on lobbying for more useful change.


We discussed my thoughts on why SAFE is kinda useless a while back, but because I can’t repost that particular Cannabis Musings without potentially incurring the wrath of a certain ex-employer of mine, I’ll reiterate my general point that it only would protect “depository institutions” (banks and savings associations), federal and state credit unions, and insurance companies providing certain lines of business with State-compliant cannabis businesses, and protect ancillary businesses from violating federal money laundering rules. That’s it.


Now, there’s quite a bit of focus (particularly on #Cannabis Twitter, if you’re a shumuck like me and actively follow that chatter) on the safety aspects of reducing the amount of cash handled by dispensaries, which may be true if the credit card companies were to allow payments based on SAFE, which isn’t guaranteed. Nor is “uplisting” certain, meaning that the Nasdaq and NYSE would allow US cannabis companies to list their stocks for trading. Even if uplisting were to occur, you’d still need to see major trading clearinghouses and custodians allowing trade clearing and custody (critical functions in stock trading). Most importantly, you’d really want to see pension guidelines change to allow for investment into US cannabis stocks – only would then significant institutional capital potentially flow into the space.


To me, the more interesting provision in SAFE is the protection for ancillary businesses. Risk of being prosecuted for money laundering tends to be the primary concern of companies doing business with cannabis, so if SAFE were to provide an exemption, that could potentially open up a host of ancillary services to the industry. Moreso, we could see some significant M&A activity from outside providers, such as major SaaS companies buying up (with inexpensive capital) cannabis software companies for the relationships and contracts, porting customers to existing platforms.


Now, you may be wondering “But Marc, if SAFE provides a money laundering exemption for ancillary businesses, wouldn’t, say, the Nasdaq be considered an ancillary business?” The answer to that question is “I don’t know! Remember, I never give legal or investment advice in this free newsletter, but it’s an interesting question! You should ask a practicing lawyer that one.”


It would be nice if the Senate were to step up and pass SAFE before the end of this term. If not, I really think the industry should cut its losses and refocus on the recent momentum towards legalization. Otherwise, it’ll never learn its lesson about that football.


© 2022 Marc Hauser and Hauser Advisory.None of the foregoing is legal, investment, or any other sort of advice, and it may not be relied upon in any manner, shape, or form.Subscribe to Cannabis Musings at hauseradvisory.com.

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