Why This Election Hits Hard

SPEAKER_00 0:00

At a high level, I mean, this was, I think, one of the most consequential elections of of my lifetime, right? Obviously, the gains that the Democrats made were staggering. Again, everything I'm saying here, people have probably heard a million times before, but now the Democrats have nearly an 80 or 90, you know, seat majority in the House of Representatives. You have to go back to kind of the Great Depression and FDR era to see such overwhelming, you know, majorities in the House.

AnnaRae Grabstein 0:41

Hey everybody, welcome to High Spirits. I'm your host, Anna Ree Grabstein, and it's November 10th, 2026. This is episode 160. And today I have a special co-host with me, our friend and fellow industry strategist, Hirsch Jane. Uh, there's nobody better to bring on to break down the election with us today. And Ben can't be here. So I credit him with saying, you really need to bring Hirsch on and go through the election. So we're doing just that. Hirsch is going to be my co-host today. So we're going to bring him on right away. Um, and welcome him to the show. So Hirsch, hello.

SPEAKER_00 1:19

Hey, Anna Ray. I'm so excited to co-host with you today.

AnnaRae Grabstein 1:23

I know you are, you know, just as handsome as Ben. So I go to share the screen with you.

SPEAKER_00 1:30

That's that's tight. I'll take it. I'll take it. That's it's yeah.

AnnaRae Grabstein 1:34

Number one qualification, you know, is is handsome.

SPEAKER_00 1:37

Facts. Yeah. Yeah. Well, so yeah.

AnnaRae Grabstein 1:40

How are you doing this week? How are you feeling? Doing excellent.

SPEAKER_00 1:43

I'm still riding the high of a very exciting election. You know, it's beautiful and sunny in California in November, so life is good. I'm doing great.

AnnaRae Grabstein 1:50

Yeah. I I feel the same way. I've been really feeling the fall, you know. I live in Sonoma County and all the grapevines are turning colors and it's just freaking gorgeous. And it also feels like the winter is coming, and I'm I'm ready for that too. You know, just all of the end of your planning gets to climax with the lovely cold slowdown that we all know is coming, but we have some more work to do to get there. Yeah.

SPEAKER_00 2:15

100%. I'm also going to DC next week, which you might be too, or maybe not. And so I'm not.

AnnaRae Grabstein 2:21

I wish I was, but yeah, that's going to be a great event.

SPEAKER_00 2:24

I'm excited. Yeah. I'm going to go out a couple days early and do what I always do. Just go to like the Lincoln Memorial and you know, read everything and walk around. So I'm really excited about that.

AnnaRae Grabstein 2:33

Oh my gosh. Um, I want to go and do a Washington, DC like walking tour with you. That's amazing. Okay. We're taking sign-ups. Uh, let's do it.

SPEAKER_00 2:43

Let's do it. Yeah.

Illinois Targets Hemp THC Drinks

AnnaRae Grabstein 2:44

Well, so we've got a great episode for you. Hirsch helped me put together our whole election roundup. Um, but we are gonna start with two state-level stories, and then we'll we'll jump into the show. So um, the first story today is about Illinois. Um, Illinois is pulling THC drinks off shelves uh starting Thursday, November 12th. That's two days from today. Any hemp beverage with more than 0.4 milligrams of THC, which is basically all of them, can only be sold at a licensed dispensary. And that takes most of the THC drinks out of liquor stores and groceries. Uh, just yesterday, Total Wine and Moore CEO Ryan Ross says that it put a mark it that it puts a market doing more than $50 million a year at risk. And he's asking for age limits, mandatory testing, and potency caps instead of a ban. So I'm keeping an eye on this one. Illinois has really become ground zero for the hemp beverage fight with some of the largest MSOs based there and hemp prohibitionist lawmakers sitting in the governor seat, uh, Governor Pritzker and Senator uh Duckworth, who are both vocal um advocates for the hemp ban in DC and have been advocates for keeping the Illinois hemp ban in November as opposed to pushing it out to December, which is when the feds um do that. And I thought that this statement from the CEO of Total Wine and More yesterday was um a bit of a Hail Mary, but also an important statement to come from um one of the biggest leaders in Bevelk these days. Um you paying attention to this, Hirsch?

SPEAKER_00 4:28

Yeah, I mean, I I agree with your reading, uh, Anna Ray. I know that hemp is a contentious issue, but I'm just such an enormous fan of the hemp beverage category, as I know you are as well. And it would be such a shame to see it disappear. And, you know, my comments on this are all obvious, right? It's just such an effective way to introduce people uh to THC. And I don't really think it's competitive with the dispensary channel. And, you know, again, the other obvious thing I'll say is that we have seen that these beverages, especially low-dose beverages, do not sell well in the dispensary setting, right, which has a very narrow segment of consumers. So all of those observations have been made a million times before, but I think that they're all true. And um, I think we're all watching what'll happen both on the state and the federal level for this category. And I'm of the belief that even if this category disappears, you know, kind of briefly based on this legislative back and forth, it will return in the not too distant future. And so I think that's encouraging.

AnnaRae Grabstein 5:18

Cool.

New York Nursery Licenses Sell Out

AnnaRae Grabstein 5:19

Well, we'll talk more about that uh later in the episode. And now to New York. Um, New York's nursery licenses, quote unquote, sold out in eight minutes, almost like a Grateful Dead concert or something. Um New York opened its first adult use nursery license window last Thursday, November 12th, 10 a.m. And by 10.08, it had hit the cap of 50 applications. And the application window, as a result, closed. Um, nurseries will be able to sell seeds, clones, and immature plants to licensed growers. And um, eight minutes, this was a surprise, I have to tell you. I wasn't sure what the appetite was going to be for these licenses in New York. And you can see it there was a high appetite. I'm sure there were people that were hoping to apply that were not able to do so. And um, regulators will now review the applications before issuing licensing decisions. So it's possible that there might be some that get rejected and more that can come in. Uh, but you know, we've got a really robust nursery uh industry in California, but there aren't many legal states that have um that have nurseries that have been successful. And I think that that comes from a variety of things, but mostly has to do with the amount of cultivation licenses and the scale of the cultivators in the market. And New York is a market with lots of cultivators, kind of like California, as opposed to a Florida that has less than 30 active cultivators. And so it makes more sense for those businesses to manage their genetics in-house. But I think this is really interesting.

SPEAKER_00 7:02

Totally. Yeah, it's cool to see them issue these licenses. I think as you alluded to, Anna Ray, it reflects the desire there is for homegrown genetics in New York. And I guess I would only say I would hope the regulators process these applications in a more expeditious fashion than other parts of the supply chain. I think that would be big, correct.

AnnaRae Grabstein 7:19

Expeditious for regulators. Yes. That sounds amazing. And New York was very, very slow. It's so true. Um, but this doesn't have to be rocket science. And uh we'll hopefully create some new exciting aspects of transactional relationships in the New York market.

SPEAKER_00 7:39

Uh totally. Let's hope so.

AnnaRae Grabstein 7:41

Heads off to all those new nursery businesses. Uh, we want to talk to you and tell us your plans. Get in touch with us. Uh what do you think? Should we talk about the election?

SPEAKER_00 7:49

I know that's what's talk about the election. Let's do it. Let's

Blue Tsunami And Cannabis Fallout

SPEAKER_00 7:53

do it.

AnnaRae Grabstein 7:53

Um, so I think that everybody has heard about the blue wave. Uh, but I'd love for you to kind of give us an overview of really what that blue wave was and um uh and where where in cannabis we saw the blue wave. Let's take take us through.

SPEAKER_00 8:10

Yeah, um, at a high level, I mean, this was, I think, one of the most consequential elections of of my lifetime, right? Obviously, the gains that the Democrats made were staggering. Again, everything I'm saying here, people have probably heard a million times before, but now the Democrats have nearly an 80 or 90 seat majority in the House of Representatives. You have to go back to kind of the Great Depression and FDR era to see such overwhelming majorities in the House. And then also in the Senate, you know, the Democrats won seats that they had totally written off that people thought were inconceivable, right? You know, South Carolina, Texas, Iowa, et cetera. So, you know, the term blue tsunami, I think is is apt and it represents a real sea change in American politics. And even independent of cannabis in array, obviously people hold these Senate seats for six years, right? So there will be an enduring character to this wave that will continue to play out. You know, put differently, I think Ron DeSantis on the Republican side said that, you know, the GOP might not be able to pick up the Senate until 2032. That has huge implications, you know, not only for cannabis, but also for things like Supreme Court nominations, right? So just to state the obvious, this was a massive election that I think shocked observers of all kinds and is remarkable. Again, I will say with some confidence, I think it's the most consequential election in my lifetime, even though it wasn't a presidential election. And then on the cannabis side, I'll just be very brief here. I think we saw a few different buckets of things. We saw some failed ballot initiatives, which we can unpack and deduce kind of the meaning of those initiatives. I think we saw a second set of states that obtained democratic trifectos, such as Pennsylvania and Wisconsin, and we can talk through the prospects for adult use legalization there. And then I think we also saw a series of split states, and we can talk through, you know, states that still have divided legislatures, whether there's an appetite for medical or adult use, given that divided legislature, that's often been an obstacle to reform. So those are the things that we saw on the state level. And then if I zoom out at a high level, and I'm sure we'll talk about this more, Anna Ray, I think you started to see the emergence of THC as a voting issue, which is not to suggest that THC made the difference in all of these states, but that it emerged as a voting issue that voters care about. And I think that could affect political behavior going forward.

AnnaRae Grabstein 10:16

Yeah, I was so shocked too about all the new Democratic governors. Uh, we were all paying attention to who was going to be seated in Congress. And I remember hearing that Talo Rico was winning in Texas, and I think it took me a full 24 hours before I realized that Texas not only got Talo Rico, but also a new Democratic governor and lieutenant governor um in Hinoyosa and in uh uh what's the Vicky Goodwin. Goodwin. Yeah, Vicky Goodwin, um, who who came onto cultivated media and talked about her platform and has engaged with the cannabis industry. So I mean, it's a big deal. We've got a number of new democratic governors um in these seats around the country too. So yeah, um it's pretty wild. And at the same time, I hear the cannabis industry being really excited about this blue wave. Um, but over the course of the past couple years, while the Republicans have been in control, there has still been a lot of movement and progress. And one of the things that we have all remarked about the Trump administration since he came back into office is that they've moved fast in ways that we have not seen seen the Democratic establishment move. Uh, there has been a lot of talk for a lot of years coming from the kind of the progressive caucus and from the Democrats. But it seems like over the past few years, the Republicans showed everyone that maybe government can move faster than we were used to. Um, things like the executive order, all of the DEA registrations. Um, there has been a teacup expansion in Texas, new medical programs in Kentucky and Alabama and Georgia and Nebraska and Ohio, all of these places where Republicans have been in control have made huge progress over the past couple of years. So I guess with that kind of balance, what is bringing this optimism that the Democrats are actually going to be the unlock for the cannabis industry?

SPEAKER_00 12:35

Yeah, you know, first Anna Ray, I would just echo a couple of things that you said. Like you mentioned Texas. I think Texas is ground zero for this blue tsunami that we saw. And I think it's probably the most important or most interesting state that we can discuss. So totally agree there. And then I just totally agree with what you said at the end there, which is over the past couple of years, it has been red states and the Republican Party that has been carrying legalization forward. I mean, honestly, everything that you just said, right? Whether it's the Trump administration's move on rescheduling, the fact that states like Ohio and Missouri have emerged as robust states, reforms in Kentucky, Alabama, et cetera. So totally agree on those two points. Now, to answer your question, why are people excited? They're excited for the simple reason that we have seen a change in control in a set of states where the only way cannabis was probably going to be reformed was for the Democrats to take some power. So I think one reason people are excited is, you know, and we'll go through it state by state. We can go through state by state and say that we've seen a change of control, and that makes reform, state-level reform, much more likely in each of those states. So I think people are properly excited where they can look at four or five different states and say we have a greater chance of movement in 2027 than we did in 2026. And then I think the other reason that people are excited is that, you know, Democrats now have, you know, majorities in Congress. And I'm sure we can unpack the skepticism there, how Democrats had a trifecta in Congress last time and didn't get anything done. And we can talk about the difference of them now having up to 56 seats, you know, with those independents compared to 51 before. Um, so I get all of that skepticism and we can unpack it. But I guess people are excited that the Democrats have power, they have more seats, and now they have a chance to go after reform after a Republican president has staked out a pro-cannabis position. Whereas previously, right in 21-22, you know, Trump hadn't yet made that move. And so I think that optimism is justified for sure. Um and I'm sure we cannot why.

AnnaRae Grabstein 14:24

I I know that for me personally, I just am enjoying this feeling of a shakeup. And I think that that shakeup energy is actually one of the things that took so many voters to the right to support Trump in 2024, and that they were like, well, we're just unhappy with what's going on. So we want something different, whether it's it's that or not. And it's it feels like similar energy now, but with a more aligned vision um that that could could benefit the industry. So let's

Massachusetts Rejects Legalization Repeal

AnnaRae Grabstein 14:59

um let's talk about the the ballot measures um in particular that both I think said something about about where voters are today, Massachusetts and Idaho. So Massachusetts question eight lost around roughly 76% to 24%, which is just incredible. Um, it ran even stronger than the polls predicted. The no margin beat the legalization vote itself, which passed initially with 54% of the vote. And there was six and a half million dollars spent um on on this on this question. And the Sam, the uh Sam action put in over 3.7 million dollars. So it's pretty wild. Kevin Sabet from Sam called it a victory and named Maine as next. I'm like, what is this guy thinking? How is this a victory? Is he just trying to keep a job for himself? I mean, I think the answer there is yes. But um I feel that this says a lot of really positive things about where the people of Massachusetts are and if if it would be realistic for prohibitionists to go and try to shut down adult use in other other states, the answer seems like no. What what is going on that that Kevin Sabet thinks that Maine is next? I would what uh what are we missing here?

SPEAKER_00 16:25

Totally. I mean, to quote your colleague Jay Rosenthal, right? This was an ass whooping for sure. Like 76-24 is unprecedented in American politics. So let's just kind of start with that and let's give immense credit to you know Ryan Dominguez and all the people in Massachusetts who are fighting uh against that uh initiative for sure. Um, so so that's number one. And look, this has been discussed so often that I don't know if I'm gonna say anything new here, but just my basic observations. Legalization passed by about 54% of the vote back in 2016. This time the repeal initiative failed 7624. So by any objective metric, like support for legalization has clearly increased. That's number one. I think number two, Anna Ray, this pierces the narrative that support was falling for adult use legalization, right? You might remember over the past couple of years, we would look at different pew polls and we would say, hey, you know, support for adult use legalization used to be at 69%, now it's at 64%. Support is fading. I always thought that people were reading too much into those election results. And I think this, in conjunction with the fact that the people of Florida, two years ago, you know, a red state voted for it by 56% margin and Ohio 57%. You know, I think that narrative we can now safely discard, at least in my opinion. There's the question of what this does for Sam's fundraising. And so I think you properly point out that they really got their butt kicked here. And so you would think that that would diminish the incentive for donors to donate to them. It's been said often before, but I think their goal in Massachusetts was never to win. They always knew that was an uphill climb, but their goal was to win or was to lose somewhat narrowly and use that as a fundraising mechanism going forward. I think they failed kind of in that goal. Um, and so hopefully it'll dampen their fundraising. And um, last couple things that I'll say, you mentioned Maine. Yes, unfortunately, no matter the whooping that they took this time, we will see them in Maine in 2027. Maine actually has a somewhat unique ballot initiative law in which your signatures carry over, right? So not every state allows signatures to carry over. So they've already collected about 80% of the signatures they'll need in Maine. So the unfortunate news I have for everyone is we'll be having the same conversation in about a year in Maine. And even though we really won big this time, we should remember next year is an off-cycle election where there's a weird turnout and weird things can happen. So although we we we won handily here, I unfortunately think we'll continue to have to deal with Sam in the future. And then the final thing I'll note is I think you can draw a connection between what happened in Massachusetts and what happened in Texas, which was not merely about THC, but was about taking something away. Right. So I think this not only shows us attitudes towards cannabis, but it reflects a hostility that Americans have to the nanny state, where you're taking something away that I already had. And I think that added an extra dimension to the voter anger that we saw here. So yeah.

Idaho Voters Defend Ballot Rights

AnnaRae Grabstein 19:10

All right. Well, take us to Idaho. Uh, that's the other state where there was uh an opportunity for voters to cast a vote on something cannabis related. What were voters voting on in Idaho and what happened there?

SPEAKER_00 19:22

Totally. And here I think all of my observations, right, are going to be pretty basic and people have made them before, but I'll just make them again, right? So in Idaho, there was a ballot initiative that would have stripped voters of the right to vote on cannabis legalization. So this initiative, which was placed on the ballot by the state legislature, again, signatures were not collected here. The state legislature put this on the ballot, right? So if this would have passed, this would have meant that any future attempt to legalize medical or adult use cannabis via ballot initiative would not have been allowed. So just to state the obvious, this is deeply anti-democratic. There is something kind of perverse about, you know, voluntarily relinquishing your own kind of like voting rights. And I think we we kind of saw it here. This initiative lost handily 6634. And I think what we should remember is that there was an effort to put medical cannabis legalization on the ballot in Idaho this year, which collected almost twice the number of signatures that was needed, but it was invalidated on the technicality. And most polls suggested that medical cannabis would have been passed by 80%. So, I mean, what's happening in what happened in Idaho is deeply anti-democratic, that legislators tried to strip voters of their rights to vote on this initiative. They were widely repudiated. Hopefully, that's something of a lesson. It's still a crime that medical cannabis legalization, that initiative that people put so much effort into was not on the ballot this year. That literally is insane. And I think this vote tells us that that initiative would have passed by wide margins. So it's a victory in Idaho, but it's a real affront to democracy, just what is happening here. There's no other way to characterize it.

AnnaRae Grabstein 20:55

Our listeners know I spent two weeks in Idaho this summer, and I think it is like one of the most beautiful states in our country. And um, it makes me insane that it is such a prohibitionist stronghold. So I'm rooting for you, Idaho. And and I am happy to see that that the voters were able to stick up for themselves. It really feels like that's what this was about. And you're right, it's an affront to democracy. I'm just over that. No, thank you. Yeah, so um now I think that we get to really unpack some of the state by state opportunities that came out of this election. And while a lot of people were were spending time talking about what was going to be happening in DC in Congress, I think that the reality is for the cannabis industry that the most short term sort of clear greenfield opportunities for us are in the states. Um, while there is still hope for federal reform in all kinds of ways, I think that the the path through it all, as it has been for many years, is is in the

Texas After The THC Election

AnnaRae Grabstein 21:59

states. So I Want to talk about Texas first. Um Texas really moved votes specifically around THC. THC, uh, cannabis and hemp were a big part of the narrative that lots of the candidate candidates were campaigning on. Um, Democrats swept the ticket, and uh the the incumbents were the ones that had pushed the THC ban um coming from the hemp industry. And it was just really historic, honestly. I think it has been 30 years since Texas has had a Democrat in the governor's seat. And the Texas medical program exists, but it is so, so restricted. Um what do we think is gonna happen in Texas next?

SPEAKER_00 22:50

Totally. Texas is so fascinating, NRA, that we could spend this entire episode talking about Texas. I mean, one of the most earth-shattering developments in American politics. And the last time a Democratic U.S. senator was elected from Texas was Lloyd Benson in in 1988. So that was like almost 40 years ago. And for it to have for it to happen across the ticket is is truly remarkable. So you're you're right that it's really historic. Now, what does Texas teach us? I think the first thing is that nanny state point that I that I made before, which is it's about cannabis access, but there's something about the state taking a right away from you for you to use a medical product for your own utility that I think voters reacted very negatively to. And again, I think that's the common thread in Massachusetts and Texas. So that's one thing. Secondly, there's a deep symbolic beauty to like beating all of these anti-THC candidates. Like a lot of these folks that lost, whether it was Dan Patrick's lieutenant governor, who has blocked any meaningful cannabis reform for 10 years or Ken Paxton as AG, right? Independent of what happens going forward, there's a real cathartic, I think, element of like ejecting all of these anti-THC candidates. So I think that is incredibly um exciting. Maybe the third thing is what we were talking about before, which is THC's emergence as a voting issue, right? And so a skeptic would say, hey man, it wasn't THC that made the Democrats win Texas. It was because of data centers, it was because of other things. And I think that's true, right? I don't think cannabis was a top five issue in this election. However, in this election, you did have one cohort of candidates embrace THC access and another cohort reject it. And so I think there are elected officials in other states who are paying attention to that. So even though a political scientist might not say, hey, cannabis was the reason that these folks won, I do think it can impact political behavior going forward. And then finally, to answer, right? There's so much about this that is interesting. To answer your specific question, Anna Ray, you're like, hey, so what's going to happen in Texas going forward? I'll make, you know, a few, again, fairly obvious points. The first is the point about the lieutenant governor. Dan Patrick was the lieutenant governor. The lieutenant governor has immense power in Texas. And it's like, in fact, quite the opposite of California. In California, when Gavin Newsom was lieutenant governor from eight years, you know, we didn't hear from him at all. But in Texas, the lieutenant governor decides what legislation gets to the floor. So the fact that Dan Patrick has been replaced by Vicky Goodwin, who after the election has been vocal about the fact that they want to pass cannabis reform, I think is an enormous positive. I think Vicki Goodwin's comments are a clue to what might happen, right? As recently as yesterday, she said, you know, we'll see a bunch of different bills proposed, right? Some of them will be around adult use legalization, some of them will be around an expansion of the teacup uh program. I think, you know, we've already seen four cannabis bills introduced. By some estimates, we could see 50 different bills introduced, right, before one is aligned on. So if I if I were a betting man in a ray, what I would say is adult use legalization in 2027 is unlikely, in part because although the Democrats have the House, the Republicans still control the state senate. What I see happening in Texas is something similar to what we recently saw in Georgia, right? Where a medical program exists and then a set of reforms, right, are added to that program to make it more expansive. And I think, you know, we'll end up going a little further uh than Georgia. So I'll I'll pause there. Yeah.

AnnaRae Grabstein 26:01

Yeah. You know, Texas is complicated because the legislative sessions happen every two years, too. So if it doesn't get done in 2027, it's not going to get done in 2028 because it won't exist. And and I will say I haven't been following the bills and what Goodwin has been saying exactly in terms of knowing what's being proposed. But I think that what was happening in terms of such widespread uh hemp access in Texas and what has been suggested as how much business was coming um into the hemp industry's pockets in Texas, which is in multiple multiple billions. It was being estimated that the Texas hemp industry was the was bigger than any of the legal cannabis states in the United States. And so I believe that Texans are ready for more than an expanded medical program. And that if the path is an expanded medical program, that I believe that Texans are going to want it to look further to the left, more progressive in terms of access than what we have seen even in Georgia, and more look like Florida, which is practically an adult use program, while still being a medical program. But I think that the path towards really open access in Texas is still a live conversation because the businesses that were flourishing so much underneath these open hemp regime, um, they felt that, they tasted that. They do not want to go into dispensaries. They want to find a way for there to be broad access. And so I think that the conversation there is going to be very interesting, um, especially because uh Texas did issue a bunch of new licenses already. And um, many of those companies that were issued licenses are folks that have large vertical adult use businesses and medical businesses in other states and are going to be looking at Texas um as a very large opportunity, not just a small, constrained medical opportunity like it is right now. And so I think that there is some alignment uh between those large companies and the stakeholders that want more broad access, but how it looks and and how it all plays out, uh, I think that nobody really knows.

SPEAKER_00 28:23

Totally. I think that's really well said. And I should say, Anna Ray, I think there are three states that have the opportunity to pioneer a new legalization model that you know we'll talk about today. I think those are Texas, Wisconsin, and North Carolina. And the reason I say that, Anna Ray, is that these states are fairly underdeveloped, right, from a regulated cannabis perspective. In the case of Wisconsin and North Carolina, it's non-existent, but they have really abundant hemp industries, right? And so the rational thing to do would be to fold those hemp industries into whatever framework is developed. And I will say the governor of North Carolina, Josh Stein, you know, has explicitly gestured at that, has said that, hey, we need to take all of this and put it under one regulatory system. Now he has a legislature that might actually give him the ability to do that. So I totally agree with you on kind of your intimating that a Georgia-style model would be unsatisfying. And I would say, you know, the people of Texas won't stand for that. So I think you will see an expansion of the medical program, hopefully with some innovative ways of incorporating all of these businesses that have grown up in Texas into this new regulated regime. I think that's the right move going forward.

AnnaRae Grabstein 29:24

Yeah.

Rethinking Legalization Beyond Dispensaries

AnnaRae Grabstein 29:25

Well, and I love that you brought up kind of what a new program could look like. And while we do want to get into some of those states, I want to take a little time and just jam on that for a second because it's something that I've been thinking about a lot. Um, in particular, you know, we've seen all these different programs come on in individual states over the past 10 years. And they look similar, they're all a little different. Um, but nobody has really reimagined it um from the ground up. And I think especially reimagining it, what what access looks like and from the perspective of the patient and or the customer, depending on how you're looking at it, the consumer of the can of the cannabis products. And uh we now have had this experiment of widespread open access to hemp products, um, some that are inhalable, some that are not, um, in all different channels, everywhere from total wine and more that we talked about at the beginning of the hour, um, to gas stations and smoke shops. And I believe that the states that are now looking at creating new programs from scratch would be well served at really opening their minds to think about more than a single dispensary channel as the only place to allow purchasing of legal cannabis. And if states think about trying to kind of thread the needle between what has been the legal cannabis industry and what was the hemp industry's retail path, they will see a transition that is able to eliminate the illicit market with a lot more success and bring in more revenue to the states through sales tax and excise taxes and all those things than they would by creating a highly restricted market. And I'm wondering if anybody is um open-minded enough to consider such a thing. Um, and if the lobbyists are ready to start drafting that kind of language.

SPEAKER_00 31:34

Totally. I mean, everything that you just said, Anna Ray, resonates with me, right? I think a way of thinking about this is like, sure, the 2026 election changed the geography of cannabis legalization, um, but could the next wave of legalization be better than the first? Can we learn to legalize cannabis more intelligently in these in this next set of experiments? So I think that should be our goal. And in terms of the lessons, right, we might have learned from the past 12 to 13 years of adult use sales, a few kind of come to mind. One is the set of lessons that hemp has taught us, right? Hemp has taught us that you need to meet consumers where they are, right? That like going into a dispensary is an apprehensive experience for a lot of people and that you need to meet consumers in normal retail channels and you need to meet them with form factors that they're that they're kind of used to, right? So I think that's one of the things that that hemp taught us. I think we've also by now learned our lesson on taxes, right? How like taxes are antithetical to, you know, the adoption of a legal market and sort of to your question, Anna Ray, about whether people are listening. You know, in Pennsylvania, for the adult use bills that have been proposed and envisioned so far, the tax rates are actually lower than you would think, right, for a blue state. So I think that's another lesson we need to learn. A third lesson might be around social equity or like economic opportunity. These schemes for promoting social equity in a lot of these states have failed. So I think we need to more intelligently think about how we democratize this market, how we allow it to provide economic opportunity for people who aren't just, you know, ex um finance bros and right and ex-lawyers, right? And to open it up more. Um, but also not pretend that these programs are going to be an antidote to the war on drugs, which was like waged for 40 years, and that us giving one license to one person will solve those problems. And so I actually think, you know, and those are some lessons. You may have some lessons as well, Anna Ray, that you want to add. I think there's the opportunity to take those lessons and adopt them in these states where there are not entrenched constituencies. And here I'm thinking about Wisconsin, I'm thinking about North Carolina, I'm thinking about Texas, even though there are some MSOs there, right? They're still very nascent, and to come up with a new model of legalization. Because, like you just said, we're leaving so much commerce on the table to the illicit market by continuing to retain this really confined model of cannabis legalization.

AnnaRae Grabstein 33:43

Yeah, and and also just like not a good customer experience. You know, it's just there's so many ways. It it broke my brain a couple of years ago when I went out to a really nice restaurant in Minneapolis and there was a THC section on the cocktail menu. And it just, even though I knew that it was complicated politically and that people had lots of different ideas about if hemp was the appropriate way to do it, it just felt like all these years that I had been working in cannabis to get to see THC in a regular quote unquote environment on a menu, it felt very validating to me. And um, I want to feel that in more places. And I want consumers to feel that and to not think that there's there's anything wrong with what they're doing, you know, that they're making a choice for themselves. So totally.

SPEAKER_00 34:36

And I'll just say quickly, I think Minnesota is a good example, right? That is a state that has made, I'm not saying it's perfect, but has made an effort to integrate right its hemp industry into its regulated uh cannabis industry. And obviously what will happen there is still uncertain based on federal and other changes, but that's the world we should want to live in, right? Where I can buy a THD beverage at a pizza restaurant instead of a beer, but I could still go into a regulated, you know, channel to buy my um higher dose concentrate product. I think that's the world we should want to live in.

unknown 35:01

Yeah.

Trifectas Change The 2027 Map

AnnaRae Grabstein 35:02

So we've got kind of two um two categories of states. The first is the trifecta states, and the second is the not trifecta states. So the trifecta states are Pennsylvania and Wisconsin. Um talk us through what the trifecta does in these states. Um let's start with Pennsylvania.

SPEAKER_00 35:25

Totally. And again, these are such interesting topics. I'm gonna go really quick in the interest of time. These are fascinating topics. So, you know, it's been 30 years, as I think you just pointed out, Anna Ray, since you know Bill Clinton was elected in '92. That's the last time the Pennsylvania Democrats had a trifecta. So it's been a really long time. I think a lot of people know that. I think a lot of people know that the GOP used to control the state senate, and they have been blocking Josh Shapiro and his effort to legalize cannabis for a few years now. So that obstacle no longer exists. I'll mention to people that a Democratic trifecta, again, you know, sometimes people's own politics bleed into this, but a democratic trifecta generally means adult use legalization. Hawaii is the only state in which the Democrats have had a trifecta and they haven't been able to legalize adult use. So I think that's one good reason to believe they could pass legalization in 2027. The other thing that I'll point out is that Josh Shapiro, who just won re-election in Pennsylvania, is clearly going to run for president. And he understands it'll be good for his primary campaign, right, if he racks up a string of legislative achievements before, you know, competing in that primary. That's why he wanted the trifecta so bad. So he could pass minimum wage, pass environmental legislation, pass transit funding, pass legal cannabis, and could go up to the primary with that in hand. And so what he wants to do, Anna Ray, is a version of what Ron DeSantis did, you know, in 2022. In 2022, Ron DeSantis won a commanding re-election, then spent all of 2023 passing red meat legislation in order to compete effectively in the primary. Now, obviously, he ran into the wall that is Donald Trump, but that's the same thing that Josh Shapiro is trying to do. So that kind of makes me optimistic. I think there are some people that, you know, have some skepticism about whether this will happen or not. I would I would say a couple of things. I would put it at like a 90% likelihood. The analogy I would offer Anna Ray is like when Abigail Spanberger won the Virginia governor's race, we did not know for sure that they were going to legalize adult use the next session. And in fact, we saw a lot of weird back and forth where it almost did not happen. So it is possible that it does not get done, but I think it's exceedingly likely just based on historical precedent, right? Virginia got a trifecta, they legalized. Minnesota got a trifecta, they'll legalize. So never say things are guarantees in life, but I think it's very likely. I think some people point out properly that, you know, especially in the Pennsylvania House, there are some really left-wing members, right, of that House, right? Pennsylvania, as people remember, is Pittsburgh and Philly, and then a whole sea of red in between. So in those cities, in Pittsburgh and in Philly, especially on the House side, which represents a narrower constituency, you can have, you know, pretty far-left members. I bring this up to say Anna Ray, there are probably some members of the Pennsylvania House that would rather legalization not happen than true leave or curely make money, right? We should just acknowledge that. But I think the fact that the Democrats now have a 20-seat majority in the House, right, will allow them to buck those members, right? When you're working with a really narrow majority, you have to cater to the whims of the most extreme members. Now they have a 20-seat majority in the House, and they also only have a two-seat majority in the Senate. And so I think that that makes clear what is kind of politically realistic here. So those are those are all the reasons that I'm optimistic, and in terms of what people should follow. I think the first opportunity is the budget process. So Josh Shapiro has included legalization in his budgets for the past few years. Legalization has been stripped out at the last minute by the GOP. People may know that the budget deadline is July 1st. So I mean, I think like uh Pennsylvania will legalize adult use via the budget by July 1st of this year. Now the impl of next year. Well, the implementation may be uncertain, but that's my rough prediction on how uh it'll pan out.

AnnaRae Grabstein 38:58

Wow. Uh Pennsylvania, 90%. I'm gonna take it.

SPEAKER_00 39:02

Take it, take it to the bank, yeah.

AnnaRae Grabstein 39:03

Yeah,

Wisconsin’s Leap Toward Adult Use

AnnaRae Grabstein 39:04

hop it over, hopping over to Wisconsin. So Wisconsin has no comprehensive medical program. And there has not been a single state that has created an adult use program without first having a medical program. And there is talk that Wisconsin might just jump the gun and go straight to an adult use program as a result of having this democratic trifecta. Is that realistic?

SPEAKER_00 39:35

Um, I think it's realistic. And let's talk about why that would be be so exciting if they jumped the gun. I do think it's important to reflect on why did this happen? How was it possible that Wisconsin got a trifecta, right? And so not to bore people with like a political science lesson, but Wisconsin has historically been one of the most gerrymandered states in the country, which is why often Wisconsin would elect a Democratic governor, but would have GOP supermajorities, right? Um, because the state was that gerrymandered. It was kind of a blue state, you know, when you zoomed out, but it had very gerrymandered districts. But in 2024, the Wisconsin Supreme Court issued a decision that required the state to draw fair maps. And I'm only bringing this up so people understand the mechanics of how you you line up power, right? And so in 2024, I mean, consider this. When Kamala Harris lost handily to Donald Trump in 2024, in other words, the GOP had a good election November of 2024, the Democrats, based on those fair maps, you know, really narrowed the Democrat the Republican majorities in Wisconsin. So the Republicans had a 20-seat uh majority in the House that shrunk to 10. They had an 11-seat majority in the Senate that shrunk to three. So really think about that. Despite the fact that Kamala lost, the Democrats, based on fair maps, clawed back a lot of those gains. Now the Senate needs every other cycle. So half of those wins they'd banked in 24, putting them in a good position in 26 with the blue wave to finally take control. So that kind of explains what you're talking about, Anna Ray, because of that GOP supermajority, because of that gerrymandering, there has been no program in Wisconsin, but because those maps changed, and because we have a blue wave, now we have a totally different situation where we have a trifecta. So that's really the remarkable set of circumstances that led to a Democratic trifecta. I'll say again, every state that has had a democratic trifecta with the exception of Hawaii, which is a little weird because the Democrats in Hawaii are kind of like Republicans, but they still call themselves Democrats, right? Every state that has had a Democratic trifecta has has legalized adult use. And so for Wisconsin, you know, it's hard to say it with 90%. I would say there's a 90% chance they pass a medical program. And all things being equal, I do think that they pass an adult use program. In part because they're surrounded by all these other states. So if they pass this medical program, they understand it's, you know, people are just going to still continue going uh over the border. So this would have sounded crazy to say six months ago, but I do think Wisconsin has a better than 50-50 chance of passing adult use in 2027. And the final thing I'll say, going to your comment, Anna Ray, like this would be the first state that would make the jump from no program to adult use, which would potentially inspire other states to do the same. I think that intermedical step makes a lot less sense than it did uh kind of 10 years ago. And I also think, right, if I'm if I'm Wisconsin, right, um, and I'm look, the Democrats are gonna have power there for two years. I don't care what they do, like this is such a purple state, they're gonna lose that power in two years. If I'm the Wisconsin Democrats, I want to show results. I don't want to wait two years to build up a bespoke cultivation infrastructure. If I'm Wisconsin, I want, I might want to think about cannabis from other states, for example, right? This is exactly the archetype of state that does not have an entrenched political constituency against it. So I'm not making that prediction, but I'm just saying like they're showing us new ways of developing this model because of these unique circumstances.

AnnaRae Grabstein 42:45

It's it's interesting. We haven't talked a lot about what's going on with the DEA in Schedule three as it relates to these states. And I think that had it not been for the recent kind of reshuffling and confusion that's going on around what the heck is happening with Schedule III and how are these DEA registrations actually going to be issued with guidance from the DEA that says that they're not going to be issuing registrations in dual-use states and that it just does not comply with all these different types of rules that we're not going to go into right now. Um, but had it not been for that, I think that I would have a stronger, a stronger hell yes to what you're saying in terms of this adult use jump in Wisconsin. I think that these states that are creating brand new programs from the ground up are going to be hard pressed to not really think about what's going on at the federal level and try to kind of weave some foresight or compliance with what DEA is saying or not saying um into these programs. So how that all happens kind of remains to be seen. Um great point.

SPEAKER_00 43:59

Totally totally agree. Great.

AnnaRae Grabstein 44:00

Um, well,

Split States Lightning Round

AnnaRae Grabstein 44:01

just because we have so much to go through, I want to do a bit of a lightning round on um these states that now have democratic governors um and but legislatures that are not necessarily aligned with them. So let's let's just go through them with a quick comment on each one. Um, let's start with Iowa, which is um a state that I've been paying close attention to, especially because it just borders so many successful um already cannabis states. Governor-elect Rob Sand wants to legalize and tax-like alcohol. He's got a GOP legislator. What's what's gonna happen?

SPEAKER_00 44:37

Totally. Lightning round, like you mentioned, Rob Sand won for governor. I mean, again, this is so historic. Nobody not named Barack Obama as a Democrat has won in Iowa in the past 20 years, right? That really shows you the depth of this change. I think the the quick summary is Democratic governor ran on cannabis legalization, um, is facing a GOP legislature that'll he'll have to compromise with. So I think adult use is off the table. What is interesting about Iowa is, you know, as you probably know, Anna Ray, they have a very narrow medical program, right? It's so narrow that actually MPP, the marijuana policy project, isn't even counted as a medical program.

AnnaRae Grabstein 45:09

It doesn't exist in my mind. Yeah.

SPEAKER_00 45:10

It doesn't exist, right? But it technically what we have seen in places like Georgia and places like Texas, conservative places, is if a narrow program exists, sometime you can have the political capital to widen that program. And we've seen in those states that even small changes there um can lead to rapid patient adoption. So my prediction on Iowa is that they will be able to find a compromise. They will have a very modest tinkering around their medical program that will force MPP to finally classify them as the 42nd medical state. Um, but we're probably still a ways away from adult use. And the one pressure point, as you pointed out, we're all the neighboring states uh with Iowa to get.

AnnaRae Grabstein 45:46

Um let's talk about North Carolina. Uh the Democrats flip to the House, the GOP holds the Senate, and um what what's gonna happen?

SPEAKER_00 45:56

Yeah, this is one of those states, Anna Ray, if you asked me about this like three or four months ago, I'd be like, there's no way North Carolina is actually gonna pass a medical bill in 2027. But with this new legislature, I think that they have a shot, right? And so as you were just running it down, they have a Democratic governor, Josh Stein, that's been a vocal cannabis advocate. They just kind of took the House, right? And and now um they're they're still down a little bit uh in the Senate. Um, so they have a state legislature that is much more favorable to the passage of a medical program. A skeptic would say, wait, the Republicans still narrowly control the Senate, so they could potentially block these things. Although if you look back through history, historically, it was the House in North Carolina that was the primary obstacle to legalization. And there's a lot of people on the Senate side that were actually carrying a medical bill. So I think those changed legislative dynamics make me optimistic they'll pass a medical bill. And then the other fact is they border neighboring Virginia. I think North Carolina has like a 300-mile border with Virginia. And so I think when adult use sales start there in July, that's also gonna add fuel to the virus. So predictions-wise, I think I think North Carolina is gonna get it done next year, although it's it's it'll be tough. I think they'll do it. Yeah.

Hemp Deadline And Continuing Resolution

AnnaRae Grabstein 47:02

Well, let's spend the remaining time that we have talking about some federal stuff. Um, there is hemp and the lame duck uh continuing resolution cliff that everyone is paying attention to for December 12th, December 11th, something like that. Um, and then the possibility of federal reform. Uh, let's take a couple minutes and talk about hemp and um and then we'll we'll wrap with a discussion about federal reform. So um there are 25 session days left and a December 11th funding deadline for the government. And that is the hemp industry's kind of long shot for getting in um language for some type of extension or regulation into the continuing resolution. Otherwise, it's all over on December 12th. And it's interesting because the folks that the hemp industry has spent so much time lobbying and educating and um working with to introduce bills are not going to be in power uh next session. So I think that some folks are really looking at this as like the last ditch effort before they need to really come in and start fresh with a whole new group of elected officials. Um, is that the right way to be thinking about this?

SPEAKER_00 48:30

Yeah, I think that's a totally fair observation. I'll say, as you pointed out, right, that deadline is fast approaching. It's about a month away. I don't think Congress has the organization or political appetite to fashion a framework between now and then. So do I know what's going to happen? I don't. But I think one of the one potential outcome would be a short-term extension, right? Similar to what we've recently seen. Another potential outcome would be that the ban takes effect. Again, I just don't really see Congress coming up with the framework in the interim and in a month from now. And I think the other points you make are well taken, right? Like a lot of the committee chairs that the hemp industry has been engaging with over the past couple of years will no longer be committee chairs in the next Congress. So that's that's going to present a real problem. I will say I'll go back to my sort of taking something away comment before, right? Um, I mean, I'm someone who believes that the access that hemp provides is great. There are some hemp products that I don't love and that I think are are kind of problematic. But regardless of where you feel, right, where you are on that spectrum, I think taking something away is always very dangerous. And so I can imagine a world in which, you know, um the hemp band takes effect and let's just say hemp beverages disappear, and that creates momentum in 2027 for, you know, the Democrats to fashion some sort of a framework going forward.

AnnaRae Grabstein 49:40

Yeah. I and I I will say that the the whispers are, and I think that the confidence level um amongst the folks that are really fighting for this is that the most likely path is an extension instead of a framework and more of a short-term extension, as potentially the CR might be short-term as well, which then opens up the need to bring all of the new um the new Congress on board to do something. If the extension is only till February or March, it's gonna put the industry in a really tough spot. And while it will give them a few a few more a few more months to figure it out, um, I have a lot of questions about how successful um they would be in being able to push forward anything past that extension. But I think that you're right that that broadly there is a belief that even if it has to go away for a short amount of time, um, it's it's going to come back. But um there's a tremendous fallout in the lives of entrepreneurs and operators who have built who we're not going to be able to make it through to wait to whenever that happens and are going to be moving on. And we're already seeing announcements of people um closing their businesses, laying off their staff, all of those things, which are very real impacts um beyond access uh to these types of decisions.

Federal Reform Betting Lines

AnnaRae Grabstein 51:04

Um okay, let's talk about federal reform more broadly. You know, for years we have seen and heard about all different types of bills that have been introduced. And the bills when the Democrats were in control of Congress looked very different than the bills that were introduced while the Republicans were in control of Congress. The way that I think about it is that the Republican bills were more about states' rights and just sort of allowing states to figure it out. Um, whereas the Democrats were looking at providing um a lot more guidance about the way that legalization should look. There was more social equity involved, there was um more taxes, all kinds of things like that in those bills. Um I wonder if cannabis will even be a priority in this new Congress. And if so, is it going to be a reintroduction of bills that we've seen from either party or something altogether different from one of these new junior senators or house members that might have an idea of their own of what this looks like?

SPEAKER_00 52:15

Yeah, you know, the prediction that I'll offer Anna Ray is that I think this upcoming Congress, the 128th Congress, will be the Congress in which some kind of federal reform gets done, right? I don't know if that's safe banking. I don't know if that's the States Act, I don't know its scope, but I believe in the next two years you will see the United States Congress pass some form of federal cannabis reform for the first time. Now, I get that people are skeptical of that. Like if you're skeptical of that, you would say things like, oh, like, you know, the filibuster, right? You need 60 votes to overcome the filibuster, which is true. I would note that the Democrats now had 56 seats compared to previously when they had, you know, a trifecta, they had 50 and 51 seats, right? When they had a complete trifecta, they only had 50 seats, and that meant anything that Joe Manchin, right, who by the way did not support legalization, did, right, would derail your entire initiative. So that's what I would say, right, about the.

AnnaRae Grabstein 53:01

There's got to be at least four Republicans that are for this. There's more. We already know that. So it seems like with 56 seats, we're we're good, right?

SPEAKER_00 53:11

I think, I think with the with the States Act type bill, right? Like with a bill that was not loaded up with democratic goodies around like social equity, I think it's plausible, right, that you could get four votes. And I think you could come up with a list of 10 people that were potentially gettable, and then maybe you could get four of them on the GOP side. So yeah, I I I totally um agree with that. Um, so yeah, that's that's the point on the filibuster. The other thing is, you know, there's skepticism of like Chuck Schumer and and Corey Booker, right? And so like I don't really have a response to people who said who say that they screwed the pooch last time. I guess I would only say this. Now, you know, someone like Schumer or whoever the majority leader is will have power, right, after Trump has already made a move on cannabis and staked out a position kind of on cannabis. And I think that kind of creates more potential momentum for the Democrats getting things done. And I'll say, you know, we've started to see a bunch of different signals, right? Like Dina Titus, right, the head of the cannabis caucus, a Democrat from Nevada, has come out and said, I'm I'm willing to work in a bipartisan way here. Roger Stone, who's as right-wing as they get, has encouraged President Trump to sign a bill that the Democrats send them. We've heard rumors, I don't know how much stock to put in this, that Trump would potentially sign like a clean descheduling bill. So I get that all of those are a little bit optimistic. But I think, you know, if I'm the Democratic Congress, I can properly identify like maybe a Democrat will win in 2028, but maybe Ron DeSantis wins in 2028, right? Like, so this is an opportunity to do a deal with someone who who um doesn't have to face an election before and and you know seems to have at least an appetite for this. And so that that creates some optimism on my end.

AnnaRae Grabstein 54:45

I love that. I think that was the mic drop for the feds. There's a lot that we don't know, but I think you laid out how it can happen. So um hopefully everybody can can take that to the bank. Um, and we're going to do a bit of a rapid fire close for last call today. Uh,

Rapid Fire Predictions And Sign-Off

AnnaRae Grabstein 55:03

and we'll both throw throw our hat in the ring for these questions, but I have three questions for us. Um, first state to sign adult use in 2027, Pennsylvania, Wisconsin, or a surprise?

SPEAKER_00 55:16

Uh I'll say Pennsylvania. Um, just because Pennsylvania has that budget process that concludes by July 1st. You know, Wisconsin's runs through the end of the year. The one um dark horse there is don't sleep on Hawaii. Hawaii hasn't gotten it done yet. So at some point they'll get it done. Don't sleep on it. Yes, okay.

AnnaRae Grabstein 55:31

I'm gonna throw my hat in for Pennsylvania also. Okay, cool. Second question. First new medical state in 2027, North Carolina, Iowa, or somewhere else.

SPEAKER_00 55:41

Iowa's legislative session ends on April 30th. So just based on those mechanics, I think Iowa will be the first one to pass uh medical. Yeah.

AnnaRae Grabstein 55:49

Well, and I I don't know those dates, and I'm just gonna vote North Carolina because I um think it's gonna be a more exciting market. And so I'm for North Carolina. That's true. Yeah. And then you might have already answered this one just now, but the question is will Congress pass any cannabis bill before the 2028 election?

SPEAKER_00 56:09

I think this is the Congress in which we finally break that seal. It could be something like modest, like safe banking, but I think it happens. And I'll just say a best case scenario would be something like the States Act, right? Which appeals to the states' rights principles of the GOP while eliminating a lot of the things the Democrats don't like. So we'll see.

AnnaRae Grabstein 56:26

And I think that while I want to believe that you're right, I'm gonna, I'm gonna vote a little more skeptical here and just say that eh, I'm I'm a little burnt out. I've lost, I've lost my reason to believe that Congress can do it. So I I'm I'm kind of unsure, undecided here, and kind of on the like eh, not not so positive side um of this one. But I hope you're right. And um yeah. So um that is our election roundup, friends. Um I hope you enjoyed it. And I loved having a guest host uh in you today, Hirsch. You are always welcome back. You reminded me that the last time you were on our show was the day after election day in 2024. So it's been about two years. It was definitely time to have you back.

SPEAKER_00 57:14

Um have me on in in two years again, and we can we can take a look at these predictions in 2024.

AnnaRae Grabstein 57:20

Yeah, or or we can do it sooner. Um so we're gonna wrap the episode. I'll do the readout. Ben usually does it, but he's not here. Ben, we miss you today. Um, thank you to our teams at Vertosa and Wolfmeyer and our producer Eric Rossetti. The link to our High Spirits Morning Mixer in Vegas is live in the episode's description. Um, please request an invite and come hang out with us in person. Do not miss this event. Um, if you enjoyed this episode, please share, like, review, do all the things. Um, and in particular, do us a favor and follow us on YouTube. Um, just search High Spirits Podcast. We're trying to hit a thousand subscribers by the end of the year. Help us achieve that goal. And thank you for listening. As always, stay curious, stay informed, and keep your spirits high. That's our show.