The Daily Toke

July 19, 2026

# THC & Politics Briefing

A federal court in Ohio just handed hemp businesses a significant win, but the legal war over intoxicating hemp products is spreading across state lines with dramatically different outcomes. On Monday, U.S. District Judge Jeffrey Helmick ruled that Ohio cannot enforce its ban on hemp-derived intoxicating cannabinoids in beverages against the 10 companies that sued—finding that Senate Bill 56 unconstitutionally discriminates against out-of-state businesses. Judge Helmick was blunt: the state redefined federally legal hemp products as illegal marijuana, then prohibited companies from selling them unless they had a physical presence in Ohio. "None of the defendants have rebutted plaintiffs' assertion that the legislature considered implementing age minimums and potency testing for all intoxicating hemp products," Helmick wrote, "and no defendant has explained why these non-discriminatory alternatives are inadequate." 💰 MONEY MOVES That preliminary injunction protects those 10 companies and their vendors from enforcement while the case proceeds—a crucial lifeline for businesses operating in what has become a patchwork regulatory nightmare.

Missouri, however, is pushing in the opposite direction with far more aggressive legislation. A coalition of hemp businesses filed a federal lawsuit this week challenging Missouri's statewide ban on intoxicating hemp products, set to take effect November 12. The bill—HB2641, which Governor Mike Kehoe signed early this year—will remove THC seltzers from bars and grocery stores and shut down the unregulated smoke shop market where products currently contain as much as 1,000 mg of THC. The industry coalition, which includes MNG 2005 (parent company of 55 CBD Kratom stores nationwide), the Missouri Hemp Trade Association, and Wisconsin-based Lifted Liquids Inc., argues the law contains "unconstitutionally vague" definitions that leave businesses, law enforcement, and prosecutors confused about what's actually banned. Craig Katz, compliance manager for MNG, pointed to lawmakers' fundamental lack of understanding: "When people are trying to legislate it, if they don't understand it, you come up with something like HB2641, which doesn't make a whole heck of a lot of sense."

The Missouri bill does align state law with an upcoming federal ban Congress approved last year—but it goes further. If Congress reverses course and allows these products, Missouri would only permit them in licensed marijuana dispensaries. If Congress delays the ban for a couple years, Missouri would still ban all products except intoxicating beverages. Bill sponsor Rep. Dave Hinman (R-O'Fallon) called the lawsuit "a Hail Mary" and predicted Missouri would simply "mirror the federal government." The named defendants—Governor Kehoe, Attorney General Catherine Hanaway, and Sarah Wilson of the Department of Health and Senior Services—have declined comment since litigation is pending. Hanaway's office said it hadn't yet been served. 🤔 THINK ABOUT IT Two federal courts are simultaneously hearing cases about the same federal hemp products, reaching opposite conclusions about state authority to ban them—suggesting the Supreme Court may eventually need to resolve whether states can eliminate legal hemp commerce to create a marijuana monopoly for licensed dispensaries.

Meanwhile, the federal landscape continues shifting. Seventeen Senate Democrats filed legislation this week to fully legalize marijuana under federal law, presenting a direct contrast to the Trump administration's approach of merely reclassifying cannabis from Schedule I to Schedule III. The federal bill represents the most aggressive legalization push in Congress, even as states remain deeply divided. Pennsylvania's legalization effort appears dead again after stalling in the legislature, while multiple states grapple with how to handle hemp products that are federally legal but increasingly unwelcome at the state level. The Ohio ruling suggests that outright bans face constitutional challenges under the Commerce Clause—a potential opening for hemp businesses in states considering similar prohibitions. 🚀 THIS IS COOL Judge Helmick's decision specifically highlighted that potency testing and age minimums could accomplish public health goals without discriminating against interstate commerce, giving other states a roadmap for regulation without elimination.

What emerges from Missouri's lawsuit and Ohio's court victory is a fundamental tension: states want to control intoxicating cannabinoid products, but the Constitution may not let them do it by favoring in-state licensed businesses over federally compliant out-of-state hemp producers. The unregulated hemp market—currently selling products with 1,000+ mg of THC in smoke shops—exists precisely because federal law permits it and state bans haven't stuck. As Congress debates full legalization while states implement conflicting bans, the courts are becoming the real legislature, deciding whether prohibition or regulation is the constitutional path forward.

July 19, 2026

Global cannabis market valuations are accelerating dramatically, with the industry projected to nearly double from $45.6 billion in 2025 to $79.3 billion by 2030, driven by expanding legal retail sales, cannabis-derived pharmaceuticals, and analytical extraction services. The market's fragmented competitive landscape—dominated by multi-state operators (MSOs) like Curaleaf, Trulieve, Green Thumb Industries, Verano, Cresco Labs, and Tilray Brands—is consolidating as larger players absorb smaller competitors and expand across state lines. 💰 MONEY MOVES Trulieve's 2021 acquisition of Harvest Health cemented its position as the largest U.S. cannabis operator by revenue, with the combined entity generating over $1.2 billion annually and posting superior profitability margins (39% adjusted EBITDA) compared to rival Curaleaf's 27%, demonstrating that scale and operational efficiency now separate market leaders from the middle tier.

Recent quarterly earnings reveal the industry's stabilization after years of losses. 💰 MONEY MOVES In Q1 2024, Curaleaf reported net revenue of $338.9 million with adjusted EBITDA of $76.7 million; Trulieve posted $298 million in revenue with adjusted EBITDA of $106 million; and Green Thumb Industries—the only major retailer to report an actual profit—generated $275.8 million in revenue with $90.5 million in adjusted EBITDA. Trulieve continues leveraging its Florida dominance, where it controls 52 percent of the dried flower market; the state's 2019 legalization of smokable cannabis products triggered a surge in patient registrations (reaching 181,000 by mid-2019) and product diversification that pushed the company to record quarterly revenues exceeding $57.9 million. Even as the industry matures and profitability improves, net losses persist across the sector—though Trulieve's losses fell 32 percent quarter-over-quarter in Q1 2024, from $37 million annually to $23 million currently.

The regulatory environment is reshaping investment dynamics. 🚀 THIS IS COOL Federal rescheduling of cannabis to Schedule III for medical applications in 2025 has reduced banking barriers for operators and positioned lending vehicles like AFC Gamma—a commercial mortgage REIT offering $10-100 million loans to state-licensed operators—to capitalize on reduced friction in the $57 billion U.S. market alone. Virginia's Democratic-controlled legislature passed bills to legalize adult-use cannabis sales in February 2025, with existing medical licensees able to transition to adult-use retail by November 2026 (under the House version) or January 2027 (Senate version) with one-time fees ranging from $5 million to $15 million. New York is exploring expanded retail access through proposed low-THC cannabis beverages in liquor stores, legislation filed this year by Senators Jeremy Cooney and Assemblymember John Zaccaro, Jr. to "expand legal access to regulated products and reduce illicit market activity."

Institutional investment vehicles have crystallized around sector consolidation. The AdvisorShares Pure US Cannabis ETF (YOLO)—featuring top holdings in Curaleaf and Green Thumb with a lean 0.76% expense ratio—benefits directly from Schedule III rescheduling and has positioned itself to capture growth in the $57 billion domestic market by tracking U.S.-focused cultivators and retailers. 💰 MONEY MOVES Curaleaf closed a $500 million debt offering at 11.5% interest rates, while Green Thumb secured an additional $50 million in senior debt financing, indicating that major operators are securing capital to fuel expansion despite persistent regulatory uncertainty at the federal level. Tilray Brands completed a strategic alliance with Canadian peer Hexo, with Tilray acquiring Hexo's convertible notes (valued between $160-170 million) and gaining 50 percent interest in Truss Beverages—a joint venture with Molson Coors' Canadian subsidiary planning to launch 15 new cannabis beverage flavors in 2022.

The consolidation math is straightforward: larger operators with superior EBITDA margins, multi-state footprints, and stable Florida anchors are acquiring regional players and extracting synergies through shared infrastructure and procurement leverage. 🤔 THINK ABOUT IT An industry projected to reach $79 billion globally by 2030—generating measurable corporate profits, tax revenue for states like Florida, and employment across cultivation, retail, and ancillary services—remains classified as Schedule I federally, meaning cannabis is officially designated as having no accepted medical use and high abuse potential, even as Schedule III classification for medical cannabis now exists and pharmaceutical companies develop cannabis-derived medications. The gap between federal policy and market reality suggests that institutional investors, state legislatures, and major corporations are already operating under an assumption of full normalization—they're just waiting for federal law to catch up to the ground they've already claimed.

July 19, 2026

Congress has effectively banned nearly all hemp-derived intoxicating products, tucking a surprise provision into a federal spending bill last November that will wipe out an estimated 95% of a $28 billion market when it takes effect in November 2026. The new cap sets the allowable threshold at 0.4 milligrams of total THC per container—a dramatic tightening from the 2018 Farm Bill's 0.3% by weight standard—meaning a single hemp gummy containing 2.5 to 10 milligrams of THC will instantly become illegal. Jonathan Miller, general counsel of the U.S. Hemp Roundtable, called it blunt: "In effect, this is a total, all out, complete ban on hemp products in the United States."

💰 MONEY MOVES The ripple effects are staggering. More than 300,000 jobs tied to the hemp economy are at risk, according to Whitney Economics, spanning farmers, extractors, manufacturers, logistics firms, and retailers. Farming operations that scaled up hemp cultivation after the 2018 legalization could face canceled or restructured contracts. States like Texas and Kentucky, which have robust hemp industries but no recreational cannabis programs, may be hit hardest. The industry has roughly one year to "figure this out," Miller warned, but executives say black-market alternatives will surge if federal regulations aren't adopted within that window to match the actual demands of consumers who, by all evidence, aren't going anywhere.

The 2026 Farm Bill currently advancing through Congress aims to support hemp farmers by lifting regulatory burdens on industrial hemp producers—allowing the USDA to reduce or eliminate testing requirements and background checks—while simultaneously tightening the definition of hemp itself to include total THC, including THCA, rather than just delta-9 THC. This codifies the USDA's 2021 final hemp regulations into law. The legislative posture is mixed: support for legal, low-THC industrial hemp operations paired with a hard line against intoxicating products. Committee leadership said regulating intoxicating hemp products was "off the table" in markup discussions.

Advocates across the industry and drug policy reform space have voiced the same concern: a sledgehammer instead of a scalpel. Paul Armentano, deputy director of NORML, told Healthline that banning the market "will not decrease consumers' demand for these products, nor will it increase consumers' safety. Instead, it will deny many consumers who previously relied on these products, including those who did so for therapeutic purposes, from legally accessing them in the future." Matt Kennicott, executive director of the Cannabis Association of New Mexico, echoed the warning: "Banning things really ends up sending consumers back to the black market. Regulating is a much safer option." The provision affects thousands of products—gummies, drinks, vapes, lotions, and countless others containing delta-8 THC, delta-9 THC, delta-10 THC, CBD, and THCA.

🤔 THINK ABOUT IT States with established recreational and medical cannabis programs are expected to absorb this hit more easily, since consumers there retain legal alternatives. But in prohibition states with thriving hemp markets, consumers face a stark choice: disappear from the legal economy or migrate to unregulated sellers. The ban closes the hemp "loophole" that the 2018 Farm Bill created, but the policy assumes demand will evaporate along with the legal supply. Industry history and basic consumer behavior suggest otherwise—and veterans relying on legal THC products for PTSD, chronic pain, and anxiety will find fewer regulated options available, potentially pushing them toward riskier alternatives.

Hemp Ban Watch will continue tracking legislative developments, regulatory clarifications, and industry responses as the November 2026 implementation date approaches. The coming months will reveal whether Congress's all-or-nothing approach actually reduces market activity or simply redirects it underground.

July 19, 2026

Researchers presented groundbreaking clinical trial results showing that a specialized THC and CBD combination dramatically reduces agitation in late-stage dementia patients, marking what may be the first effective pharmaceutical treatment for this long-neglected population. The Phase 2 LiBBY trial, presented at the Alzheimer's Association International Conference in London on July 14, 2026, enrolled 120 hospice-eligible dementia patients across ten U.S. medical centers and tested a novel 2 mg THC/100 mg CBD oral formulation delivered twice daily in digestible oil. 🚀 THIS IS COOL Within just two weeks, participants receiving the treatment showed a statistically significant 6.27-point greater reduction in agitation scores compared to placebo, with benefits sustained through week 12, where treated patients experienced an 8.23-point advantage—and clinician-rated improvement jumped from 83.9% at week two to 87.2% by the trial's end, a response rate rarely seen in dementia psychiatric trials.

Dr. Jacobo Mintzer, lead investigator and psychiatrist at the Medical University of South Carolina, called the results "robustly positive" and emphasized their significance for a historically overlooked patient population: people in the final stages of dementia for whom no existing treatments address agitation. The trial design itself was rigorous—randomized, double-blind, placebo-controlled—and crucially, visits were conducted in patients' homes rather than hospitals, reducing distress for individuals already struggling with end-of-life care. Overall adverse event rates were similar between treatment and placebo groups (46.7% versus 42.4%), though serious adverse events occurred slightly more frequently in the treatment arm (23.3% versus 11.9%), with investigators determining that none were medication-related.

The specific formulation used in the trial cannot be replicated with over-the-counter cannabis products available at dispensaries or through recreational channels. Researchers issued a critical warning that unregulated cannabis varies dangerously in purity, dosing, and composition, making any therapeutic claims about street or retail products scientifically unfounded. This distinction matters because it anchors the trial's success to precision medicine—a pharmaceutical-grade cannabinoid combination administered under medical supervision—rather than encouraging patients or families to self-treat with uncontrolled products.

The broader scientific picture around cannabinoid therapeutics continues to expand. Separate research from the European Molecular Biology Laboratory has provided molecular-level insights into how THC interacts with human proteins, specifically showing that THC inhibits autotaxin, an enzyme involved in cell proliferation and implicated in cancer, inflammation, and pulmonary fibrosis. Additionally, the University of Calgary is now conducting a Phase I trial sponsored by Avicanna to define safe oral THC dosing and measure anxiety and mood effects, advancing foundational cannabinoid research. These parallel efforts suggest that as researchers understand THC's mechanism of action more precisely, therapeutic applications may expand beyond dementia agitation.

🤔 THINK ABOUT IT For decades, dementia patients experiencing severe agitation have been sedated with heavy pharmaceuticals—opioids, benzodiazepines, and antipsychotics—drugs that carry their own risks and side effects. Now, a plant-derived compound with zero recorded overdose deaths in human history has demonstrated clinical superiority in a rigorous trial, yet remains classified as Schedule I, the most restrictive category reserved for substances with "no accepted medical use." The evidence from 120 real patients showing sustained behavioral improvement over twelve weeks is difficult to ignore, and regulators and clinicians will now face pressure to reconcile the trial data with the federal classification that has governed cannabis for over fifty years. Whether this results in expanded access, insurance coverage, or further clinical investigation may ultimately depend less on the science and more on how quickly policy makers are willing to align regulation with demonstrated therapeutic reality.

July 19, 2026

Texas hemp regulators are blocking smokable cannabis products with new rules that took effect March 31, but federal judges are blocking the regulators from enforcing them. The Texas Department of State Health Services released regulations capping hemp-derived THC at 0.3% total concentration—a calculation that includes THCA, a compound manufacturers have been using to legally circumvent the old Delta-9 THC limits. Smokable flower and pre-rolled joints, which account for more than 50% of some retailers' inventory, are now banned under these rules. 💰 MONEY MOVES The state also tripled licensing fees overnight: manufacturer permits jumped from $258 to $10,000 per facility, and retail registrations from $155 to $5,000 each. Industry leaders argue this fee structure is a ban disguised as regulation, designed to force businesses to close rather than comply.

A Texas judge issued a temporary injunction on Friday blocking state enforcement of these rules, allowing hemp products to continue selling at least until July 27. Judge Daniella DeSeta Lyttle ruled that hemp businesses had established a "probable right to relief on their claims" and would suffer "immediate and ongoing harm" from the ban—disruption of supply chains, loss of market access, and compliance costs under rules "likely invalid." The industry lawsuit argues that under state law as approved by lawmakers and the governor in 2019, cannabis products containing no more than 0.3% Delta-9 THC are legal. The regulators' new "total delta-9 THC" formula using post-decarboxylation math that counts THCA—a non-intoxicating precursor—may exceed their statutory authority.

Governor Greg Abbott vetoed a legislative ban on these products last summer, but then asked regulators to do the job through rulemaking instead. The Texas Hemp Business Council released a policy analysis in July arguing that available evidence does not support treating hemp-derived THC as a public health threat "on the scale of alcohol, tobacco, opioids or illicit fentanyl." The council's research concluded that Texas' own fiscal analysis projected millions in lost revenue and forced business closures, while a ban would hand roughly 50% of the legal market to unregulated operators. 🤔 THINK ABOUT IT Alcohol kills approximately 95,000 Americans per year according to CDC data, and tobacco kills roughly 480,000. Cannabis has never caused a recorded overdose death in human history. Yet Texas is imposing a regulatory ban on a zero-death product while keeping the two substances that kill tens of thousands legal and taxed.

Marijuana remains fully illegal in Texas—any Delta-9 THC above 0.3% is a felony outside the plant, and possession of any usable amount is a jailable offense. Texas is one of only 26 remaining states where marijuana is still criminalized. The state has expanded its Compassionate Use Program for low-level THC medical cannabis under narrow circumstances, but recreational legalization shows no movement in the legislature. Meanwhile, as other states continue legalizing cannabis for medical and adult use at an accelerating pace—with over 155 million Americans now living in legal cannabis jurisdictions—Texas regulators are moving in the opposite direction, aggressively restricting a federally-legal hemp product that has zero recorded overdose deaths and zero Schedule I classification under federal law.