Hirsh Jain: [00:00:00] The argument that I want to make is, you know, Trump, like, probably over time has softened on cannabis, right? He seems like he has met more, um, you know, although he is generally anti drug and is a teetotaler, it seems credible that he has met more people over time who evolve his view on cannabis.
Like, if you listen to him, Tommy, talk about medical cannabis. It's actually pretty persuasive, right? Like, it's like, this is a guy who's probably been around some old people that have used medical cannabis. So, I guess what I want to suggest is, like many Americans over the past decade, including many older Americans, like my parents, right?
Their views on cannabis have evolved.
But I guess what I want to say is, although he has supported it, it is clearly not one of his top priorities, right? His top priorities were those that were, um, issued via executive action.
And so I believe there are two states at the adult use level and four states at the medical level that have the chance to pass this year. And so what I want to suggest is, You know, if those pass, that will put the spotlight back on cannabis and will motivate him, remind him, right, that he [00:01:00] should follow through on his promises here.
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Tommy Truong: Hirsh, thank you so much for joining us today.
Hirsh Jain: Tommy, it's, uh, so great to be back with you.
Tommy Truong: There has been a lot of questions on what is going to happen with federal cannabis legislation, as well as state, now that the new administration is coming in. So what's happening? What's going on?
Hirsh Jain: You know, I think the new administration and its posture towards cannabis, that is the big question that all of us have been trying to answer since we got the election results on November 5th. And here we are three months later, and I think we're still trying to answer. I think what I want to offer at the outset is the idea that, you know, Trump and his willingness to engage on cannabis, and I think this is underappreciated, I think it will be impacted by the state level progress that we could make this year on adult [00:02:00] use and on medical initiatives, and vice versa.
So, I guess what I want to suggest is, if Trump were to lean into cannabis, Then I think he makes adult use initiatives passing and, and some medical initiatives passing more likely. And I also think, if those initiatives pass, it'll put increased pressure upon him to follow through on some of the positive statements he made about cannabis.
So, maybe we can start just by a refresher on some of the positive statements he's made on cannabis. And then we can go to the different states that, that might move in 2025. And so I think most people know this by now, right? But Trump made waves. Um, in the fall of 2024, in the last few months of the campaign, where he kind of came out with his strongest statements to date on cannabis.
I think most notably, people will note that he endorsed, you know, the Florida Adult Use Initiative, which unfortunately did not pass, but was really significant. It was the first time a sitting presidential candidate had endorsed, you know, an adult use initiative in their home state. So that was really big.
And you may [00:03:00] also remember Tommy that, um, you know, he went on a bunch of different podcasts, right? And he spoke our language, quite frankly. He demonstrated real fluency when it came to the objectives of the cannabis industry. He mentioned, you know, obviously Florida. He also spoke with, you know, a way that really impressed me and surprised me, quite frankly, about the utility of medical cannabis.
And many people have suggested that a lot of people in his orbit, whether it's elderly people at Mar a Lago or his advisor, Roger Stone, have made him found the, find the gospel on medical cannabis. Um, he sort of tacitly expressed support, uh, for rescheduling, right, that the Biden administration had initiated, which is really kind of rare, right, to see Donald Trump express support for something that Joe Biden, um, had initiated.
And then he also spoke about the banking challenges that the industry, um, had experienced. And this was all kind of in August and September of last year. And his speaking about the banking was kind of consistent with the understanding of him as a businessman. And so, I think that's all a way of saying, you know, if we remember the headspace that we were [00:04:00] in, four or five months ago, um, there was a lot of excitement.
Because we said both presidential candidates have expressed their support for cannabis. Trump has done so in a really substantive, And, and unique way. And that kind of started the debate, maybe the discussion we're having today, about where he, he might take cannabis. I'll just say, look, there, there will be an ongoing debate, um, about whether Trump will move on cannabis, and a lot of that will track with how people feel about Donald Trump.
Right? Um, critics of Donald Trump will, will, would likely say, well, he doesn't keep his promises, you know, he's liable to say anything, he was just campaigning. Whereas, you know, supporters of Donald Trump, you know, will say, no, he has found the gospel, Joe Biden didn't do anything on cannabis. He will finally move us forward.
So, that's a big debate, you know, probably not one we're going to resolve on this podcast. But maybe what I want to suggest is, he made those really supportive comments in September. We have not heard from him much on the subject since, which has made a lot of people nervous, and has, you know, started to, you know, create some doubts in some people's minds about whether he might act on cannabis.
Um, without wading into that [00:05:00] debate, I guess what I want to suggest is, You know, in 2025, there are both adult use initiatives and medical initiatives that we should really be paying attention to. Because I think, again, Trump's engagement could help these get over the finish line. And I also think these getting over the finish line, um, will also impact Trump's engagement.
So there's sort of like a yin and yang, right, or a back and forth going on here.
Tommy Truong: You know, I, I, I feel as though there are so many things, if you look at all of his executive orders that he's done, there were all pressing issues that he was talking about and maybe cannabis comes after his administration gets appointed. So the people that he is appointing, Pam Bondi, what's her stance on cannabis and who's going to lead the DEA?
And what's, what's the new, uh, the new heads, uh, that are coming in? What's their stance on cannabis?
Hirsh Jain: Yeah, I mean, I think there are, you know, as you mentioned, three, um, important, [00:06:00] you know, or at least three important people to be paying attention to here. Um, one is Pam Bondi, who's the nominee for attorney general. You know, as we're recording this in late January, Pam Bondi is going through her confirmation hearings.
I expect that by the time this comes out, uh, Pam Bondi will be confirmed as attorney general because the Republicans have the votes in the Senate. And so, you know, um, what can be said about Pam Bondi is that she is probably neutral at best on cannabis. Right, so critics of, of Pam Bondi, who used to be the Attorney General of Florida, people who don't think she's going to do anything, will say, well, when she was in Florida, she was, you know, against the medical initiatives there, and she has, you know, demonstrated a hostility towards cannabis.
I think that's, that's totally fair, but I think, you know, people on the other hand might say, well, you know, her job as Attorney General was to do what her principal Um, then the governor of Florida told her to do. And the way that she's been described is that she's a very loyal kind of foot soldier, right?
That she will execute the program that the principal that has put her in that office, um, intends to happen. So, I know that's not a great [00:07:00] answer to your question, Tommy, but it's like some people will say, Hey, look at these anti cannabis things that Pam Bondi said eight years ago. And, you know, one could say, well, most politicians, including, you know, Kamala Harris, who just ran on legalization.
Was saying similar things eight years ago. I think it's more accurate to state that she will take her marching orders from the person in charge, which kind of brings us back, um, to, uh, to, to what I was saying before about Trump. And, you know, before we talk about some of the other kind of folks that you mentioned, um, maybe I'll just say, you know, this rescheduling debate continues to drag on, right?
We're now almost two and a half years into this rescheduling process that Joe Biden announced. I probably don't need to tell your listeners that we experienced yet another delay, right, um, in January of 2025, where the, the DEA Administrative Law Judge said that this process should be, um, punted for another three months.
And I'll just touch on this briefly because I'm sure everybody has already heard about it. But, um, you know, what the, the DEA Administrative Law Judge, Judge Mulrooney, identified was really some nefarious [00:08:00] communications between the DEA and those who were opposing rescheduling. It kind of confirmed a lot of our long held suspicion that the DEA has no interest in rescheduling cannabis, and despite what the science says is interested in, in gumming up, uh, the, the process.
And so, I, I bring that all up to say The unfortunate thing is malfeasance by the DEA resulted in yet another delay for those of us, um, in, in the cannabis space. And so I think any fair minded person would say, hey, we're going to be waiting on rescheduling probably until late 2025, um, because we have to wait another three months for this process to unfold.
Then the process itself, the hearings take several months, and then the final rule will be published. I guess the caveat that, that I would add, and then we can talk about maybe some of these other appointments at the DEA level and, and HHS, um, um, The caveat that I would add is that this administrative law judge hearing, you know, this ALJ hearing is largely optional, right?
And the Department of Justice, you know, in theory, has the ability to circumvent this process, [00:09:00] right? Like, a year ago, we did not know that it was a foregone conclusion that there was going to be this long Couple couple month process. And so one of the things that we've seen in the first couple weeks of the trump administration is that they're willing to do things differently, right?
They're willing to willing to circumvate normal processes to get things done. So I guess my just comment there is yes, like a fair minded person would say the rescheduling slog continues. We will continue to be delayed and this process will unfold, but we should understand there is a world, right, in which the DOJ could in theory step in and say, hey, we're going to move this to a final rule.
And again, that, that goes back to what we were saying at the beginning, like, what might it be at the state and federal level that kind of puts that, that pressure on them to do so. So I can give you my thoughts on, on DEA and HHS, but I'll just kind of pause for a
Tommy Truong: Yeah, please. I'm really interested in what your thoughts are about this.
Hirsh Jain: Yes, I mean, uh, you know, again, you know, cannabis is not for the faint of heart, right? Um, As we've learned, like what year is this? [00:10:00] Um, uh, so, uh, look, uh, we have a new interim DEA head, you know, the previous, uh, DEA head. Uh, head of the DEA was a woman named Anne Milgram. Um, Anne Milgram really did us no favors by not really expediting that process, but she was an appointee of the Biden administration.
Um, now that, uh, we moved on to the Trump administration, she is no longer, you know, the head of the DEA. There's a current acting, current acting head of the DEA named Derek Maltz, right? And here my comment is going to be very similar to the, on the one hand, on the other hand comments. That I've made before.
So on the one hand, right, you see this guy, Derek Maltz, who's a lifetime DEA employee being appointed, and he's the interim head, and there's good reason to be concerned, right? This is someone who has tied cannabis to the presence of school shootings, right? Um, this is someone who, you know, clearly has spent decades in the DEA and recycles every negative talking point about, um, about rescheduling, right?
Um, or, or about cannabis generally. So, you know, a fair-minded person would be concerned that this [00:11:00] is the person that in theory is in charge, you know, or, or leading our fate right now. Now, again, just just to offer the caveat, there are others that say, yeah, you know this, this guy Derek Maltz, he sounds like a boomer.
He sounds like a dinosaur when he talks about cannabis. But he's also quoted as saying, despite his reservations about cannabis. That if the science supports it, then maybe it's okay, right? Um, and maybe we should focus on things like fentanyl, right? So you can kind of pick and choose, cherry pick your comments about whether you want to focus on his reefer madness, or whether you want to focus on his more pragmatic comments.
And again, you know, someone who is playing, trying to play devil's advocate would say, Actually, if you look at this guy's career, you know, his career has consisted of going after really big time drug dealers like El Chapo, right? Um, and so he is a legend in DEA circles for pursuing, you know, these, these drug dealers who are pushing fentanyl.
And so, look, it's hard to get inside his head, but you have both sides of those arguments, that argument there. Maybe the only other thing that I'll say is that this is someone that [00:12:00] is the acting head of the DEA, right? Donald Trump still has the authority to appoint his own head of the DEA. And again, there's so much that happens in these news cycles we almost forget.
So just to remind people, you know, if you remember a couple of months ago Donald Trump did in fact appoint a new head of the DEA, a gentleman by the name of Chad Chronister. And the cannabis community was elated for about 48 hours because this is someone who had expressed support for rescheduling. Um, but then this gentleman had to withdraw, um, his, his nomination allegedly because of some things that he did on COVID that didn't square with, with the Republican Party.
So, um, I, I won't, I mean, I won't deny that this is totally exhausting, this parlor game that we're playing about what will happen is exhausting. So maybe, maybe before we talk about RFK and HHS, that's my comments on the DEA. The guy in the seat right now, you know that you can read his comments either way.
He probably won't be in that seat for for that long and You know ultimately the power rests with people that are above the the DEA But it sure [00:13:00] would be helpful to have someone in that seat that was sympathetic To our position and we'll just have to wait to see if that comes next week or next month or or longer from now
Tommy Truong: gosh, it's everybody's on pins and needles right now, just waiting for this. So really, in summary, it's really the DEA that's going to decide, if not, then the DOJ. And once the DEA decides eventually to reschedule, then now it falls under the NHS.
Hirsh Jain: Yeah, uh, well, so I would say that's, that's, that's largely true. I would say the DOJ is the ultimate decider, right? So, like, you know, I would say it would be helpful to have someone in that DEA role that is sympathetic to us, or at least is not an opponent, because the reason this process got dragged on so long, and that we're even talking about it now, is because we didn't have someone friendly in that seat.
We had someone in that seat that wanted to drag on this process. So I would say the DEA head is important, but ultimately what matters most Um, is the head of the Department of [00:14:00] Justice. They have the authority to bypass this hearing and to go ahead and implement the final rule. And so when we're saying the DOJ has authority, um, you know, what, what we're also saying is that Donald Trump essentially has authority.
Because technically, you know, the Attorney General is supposed to be independent of the President, right? Technically, Merrick Garland was not supposed to be doing the bidding of President Biden. But, um, I think as, as, as time goes on, right, we, we see that those political appointees do that. So I would say the DOJ is what matters most and maybe just to put a pin on it, right, right now, Tommy, as we're recording, um, RFK, right, um, is going through his own confirmation hearings, um, in the Senate, um, because the Republicans have a big majority in the Senate.
I would hope he would be, you know, you, you would think he would be confirmed and I think he will be by the time this comes out. And so again, what I would say there. is, you know, it would be helpful. People will highlight the fact that, you know, RFK more than any other HHS had in history has really expressed a support for plant medicine and a skepticism of pharmaceuticals, and has said explicitly there would be [00:15:00] tremendous utility in legalizing cannabis.
And so on the one hand, you can be optimistic about that. Um, But on the other hand, you know, the HHS's role in this process is already kind of done, right? This was always a two step process where the HHS was supposed to give us the science, which they clearly did, and the DEA was kind of supposed to bring this over the finish line.
Unfortunately, the DEA failed to do its job there, and so Uh, you know, while it would be helpful to have RFK as the head of the HHS, he does not have the same amount of power as someone like Pam Bondi, the attorney generalist. And so maybe that's the concluding comment. Maybe we need to focus most on what she is doing and whether this is a priority for her and that in turn will depend on whether it's a priority for Trump.
I
Tommy Truong: And what you're saying is it really trumps his opinion on how big of an issue cannabis is really depends on what happens at the state level.
Hirsh Jain: to an underappreciated extent, I guess that's the argument that [00:16:00] I want to make. The argument that I want to make is, you know, Trump, like, probably over time has softened on cannabis, right? He seems like he has met more, um, you know, although he is generally anti drug and is a teetotaler, it seems credible that he has met more people over time who evolve his view on cannabis.
Like, if you listen to him, Tommy, talk about medical cannabis. It's actually pretty persuasive, right? Like, it's like, this is a guy who's probably been around some old people that have used medical cannabis. So, I guess what I want to suggest is, like many Americans over the past decade, including many older Americans, like my parents, right?
Their views on cannabis have evolved. I think Trump was smart enough to understand in September of last year that the country had shifted, right? And that he was confronted with this very specific question of like, hey man, you're from Florida. How are you going to vote on this Florida ballot initiative, right?
This rescheduling process is going on. So the argument I want to make is, he has been softening over time, like many people in this society. He was smart enough to understand that in a moment in history, he was called upon to take a position on an issue, and he wanted to take the right [00:17:00] position, which, you know, even though Florida didn't pass, most people actually agreed with him.
The Florida ballot initiative got about 56 percent of the vote, which is the same amount of the vote that he got in Florida. But I guess what I want to say is, as you alluded to earlier, Tommy, right, in, in your comments, although he has supported it, it is clearly not one of his top priorities, right? His top priorities were those that were, um, issued via executive action.
And so I believe there are two states at the adult use level and four states at the medical level that have the chance to pass this year. And so what I want to suggest is, You know, if those pass, that will put the spotlight back on cannabis and will motivate him, remind him, right, that he should follow through on his promises here.
So that's one thing. And the other thing is In some of those states, there are key Republicans, right, in key positions there. And whether these, in fact, pass will depend on large extent to whether those people drop their anti cannabis politics. And there was a lot of talk, Tommy, you remember, about, Hey, now that Trump has taken this [00:18:00] position on cannabis.
Will these other people soften? So I think it's kind of a back and forth here. If he leans in with a supportive statement, that could move these legislators. If these things move forward, and I'll give you maybe a couple, a few specific examples in a second, um, Then I think you could see him move. And so.
Maybe I'll quickly touch on a couple examples, but let me know if you want to go
Tommy Truong: Oh, please.
Hirsh Jain: Yeah, so right now we have 24 adult use states and 39 medical states. So, you know, let's all think about that, right? Right now, 24 out of the 50 states have allowed adult use, and 39 out of the 50 have allowed for medical.
What I want to suggest is that I think we have a really good chance this year of getting over the 50 percent line when it comes to adult use states. I think there are two states. That are I would say more likely than not to legalize. It's not a done deal, but Hawaii and Pennsylvania and we'll talk for a second about why they're important have the ability to get us to 26 states.
And I think once you do that, you cross kind of an unspoken tipping point, right? Even if some of these states are small, like [00:19:00] Hawaii, right? Um, I think getting to 2526 states crosses a psychological barrier and engenders the assumption that most states have taken this action. And so the federal government should too.
Mhm. The, um, analogy I would offer you, Tommy, is that, you know, for, for about 10 years in this country, state after state legalized gay marriage and the federal government did nothing, but it was not until we hit the 32nd state that legalized gay marriage that people started to say, wait a minute, this doesn't make any sense, that all of these states, this federal state conflict is no longer tenable.
And so, you know, I guess that's that's the first point, which is that there are two states, Hawaii and Pennsylvania that I think are likely to go from 24 to 26 this year. And I think, Tommy, we could actually do a whole episode on Pennsylvania because of how important it is, not only because it's the most immediate.
Growth catalyst, probably for cannabis, given that it's such a large state, but also, as we know, it's such a quintessential swing state, right? It is a very divided state, and so if there [00:20:00] is the ability to pass adult use in Pennsylvania, and in a second, if you want, I can give you my thoughts on why I think it's finally going to happen, but if you can do it there, it has incredible symbolic importance in the country that you can fashion a bipartisan agreement in this divided country.
So, that's, I guess, the first point, which is like, hey, Hawaii and Pennsylvania, if they go, then we're living in a world where most states have legalized adult use cannabis. I think that slightly changes the tenure of the conversation going forward and allows us to build momentum. And then the, the other one I want to mention, and this is a little bit less sexy, right?
People pay a little bit less attention to medical. But, right now we have 39, uh, medical states. If you go back and you read the HHS report that provided the sort of conceptual justification for rescheduling. If you look at it really closely, Tommy, it's not just that they say that cannabis has medical utility.
What it says in that report, and I actually advise reading all 250 pages of it. It is, if you work in this industry, it is awesome and we'll We'll, we'll, um, remind you why, why we're all [00:21:00] doing this work, but if you read that report, Tommy, it says, well, actually we have these state experiments going on, right?
We have all of these different states that have adopted medical programs and have, you know, fashioned it into a medical good. And so the point there is that rescheduling the basis for it was not just a bunch of studies that were done by scientists. It was done based on the lived real world experience of these states.
And so I'm just going to mention a few states. Quickly, right now, right now we're at 39. There are four that I think have the potential to pass this year. I'll give you my take on how many might actually pass, right? But the four that have the potential to pass are the two Carolinas. So North Carolina and South Carolina, right?
Um, those are two states that have flirted with medical and have fallen short, right, every year. And then you have two states that are being surrounded, is what I would call it, right? Um, and so Indiana, right, now after Ohio has gone to adult use, is surrounded on all sides, you know, Ohio, Illinois, Michigan, by adult use states.
[00:22:00] Anybody who lives in Indiana can drive 90 minutes or 60 minutes. or 30 minutes to their closest neighboring state and buy weed, right? Similarly, Wisconsin is surrounded, right? Uh, Wisconsin is now surrounded by states that have allowed, uh, uh, um, adult use cannabis. And so, I think the, the point there on, on medical, is right now we're at 39.
Um, we have, there are four states that are in play this year. If I was a betting man, Tommy, um, I would say probably two of these four passed this year, right? And the key question in each one of these states, like literally in every single one of these states, It all comes down to, like, one or two or three Republican legislators, right?
It comes down to, you know, one Republican with power in these states. And so, if we can be successful and get two or more of these over the finish line, um, it will demonstrate that these Republicans have moved on cannabis, and it also will further, in the same way the adult use initiatives, like, just provide a, like, a lightning bolt of [00:23:00] clarity, it'll be like, wait a minute, guys, we have 41 states.
How can we, how can we continue to say that cannabis, um, does not have more, um, medical value? So, there's a lot that could be said about all of these states. I think that there's a lot of detail there, but that's just the high level, uh, on them.
Tommy Truong: I, that's a lot of movement, a lot of movement. I had no idea that these states were that close.
Hirsh Jain: Yes, they, they were close. Now, a cynic would say, hey, Hirsh, like North Carolina and South Carolina have introduced medical bills for the past four years, right, and each time they've fallen short. So you're right, right? Like, that's why I say out of these four, maybe only two will pass. So I totally take the argument that we've talked about this before and we failed.
But I think one of the things that we see in cannabis is sometimes you need to fail, unfortunately, a few times before you get something over the finish line. I think we'll see that in Hawaii this year, where similarly, right, Hawaii, the only kind of blue state left that has yet to legalize cannabis, the only state that has a [00:24:00] democratic trifecta that has yet to legalize cannabis, it has fallen short, right, each of the past three years.
And, you know, in 2022, we're like, oh, we think we'll get it done this year. But I do believe, and we'll have to see what's true, that we are now closer than ever, um, in these states. And, yeah, maybe the other thing that I'll say, Tommy, is, you know, part of it is, you know, in North Carolina and South Carolina, you try and you fail, you try and you fail, and then you come back.
And then there are states like Indiana and Wisconsin, where a practical reality just starts to emerge. Right? Where, in Indiana, just to give you a really specific example, The current governor of Indiana, a gentleman by the name of Mike Braun, a super conservative guy, has basically been like, You know, I've never really been a fan of cannabis, but we are surrounded on all sides, clearly we need to do something here.
And what he has said is, I'm, I'm supportive of medical, and I'm open to a conversation about adult use if we talk to law enforcement. Now, that's a Republican's way of saying, hey, let me get some cover for supporting it here, but I think you start to see that shift, [00:25:00] uh, ever so slightly.
Tommy Truong: Well, they're losing so much money to their neighbors. So much
Hirsh Jain: I mean, it is. It is astonishing. I mean, um, it is astonishing. And I think those reports that really identify, um, you know, that tax revenue is important. I think there's a few components of this, right? 1 is sort of the tax revenue, the economic competitiveness argument. And I think another element of this is just a law enforcement question, right?
The idea that someone should be arrested, right, uh, for buying a product that is legal in another state, it just doesn't pass the b the basic smell test. And so, I think those are kind of the two things. Like, politicians Are now have the courage to speak up by framing this as an economic development issue And then there is a criminal justice part of this conversation where society intuitively is like well It doesn't really make sense that I could cross that state line And and participate in an economy and if i'm doing that here, it's it's a
Tommy Truong: You mentioned this earlier, how the federal government [00:26:00] influences the state and vice versa. I think Trump, if there's one thing that he's done is he's made Republicans more moderate. The party is a lot more moderate now and their stance on cannabis is, uh, Has changed.
Hirsh Jain: He has definitely dispensed with a lot of the orthodoxies that used to define, uh, the, the Republican Party. And so an optimist would say, right, like, you know, sort of trying to answer the question that you asked at the outset and that we're all trying to answer. An optimist would say, this is a guy who deviates from traditional Republican orthodoxy.
This is a guy who looks at something through an economic lens. This is a guy who's a populist, right? And so. Those debates won't be able to be resolved until we see what happens one way or another, right? But, that's the hope. Um, that's the hope here. And, uh, yeah, go ahead.
Tommy Truong: So what has changed in Pennsylvania? Cause I remember talking to you last year and there was hope but it was, it was a long shot.
Hirsh Jain: Yes. Yeah. Last year, um, [00:27:00] I was one of the people that said, Hey, like, I don't think this is going to get done, um, last year. And so, um, whereas last year I thought there was like less than a 10 percent chance of it passing. If I were to put numbers on it this year, Tommy, I would say, I think there's better than a 50 percent chance of adult use passing in Pennsylvania.
So again, none of these things are guaranteed, but that's sort of my effort to quantify what's most likely here. Right. And so then the question is like, okay, Hirsh. So like, what has changed? Right. Why, why do we have a better shot in Pennsylvania? Uh, this year. So number one, Pennsylvania's budget has gotten a lot worse over the last 18 months, right?
So, uh, Pennsylvania is on track to have a several billion dollar budget deficit, which is not something that they had a couple of years ago. And so they're now they're looking at new sources of revenue. I know people always look at cannabis as a cash cow, but now, right, Pennsylvania is looking at things like skill games and cannabis, things that they were reluctant to move on before because they're like, hey, you know, um We need to make money here.
So that's number one. Number two, the presidential election is over. That is really the crucial thing. [00:28:00] If you looked at the legislative calendar last year for Pennsylvania to legalize, right, and not to get too nerdy and wonky here, but Pennsylvania's legislative session, right, its fall legislative session, went from September to November of 2024.
You could have looked at that a year and a half earlier and been like, okay. Is there really going to be a priority of the, in this divided state where the Republicans have the Senate and the Democrats have the House and there's a Democratic governor? Is what they're focused on in September and October of 2024 going to be getting weed passed?
It's like, no. They're both going to be duking it out for what has, you know, been billed as the most important swing state in the country. So that's an important thing. Like, bipartisanship is really, really, really hard, um, a couple months before a presidential election. Another piece of that is, you know, Governor Josh Shapiro, right?
So Governor Josh Shapiro is going to run for re election in 2026. Um, because the Democrats failed so miserably, right, in 2024, he's probably one of the leading candidates for presidency in 2028. How do you position yourself, right, for, like, a presidential candidacy? You win, um, re [00:29:00] election by a wide margin in a bipartisan, you know, divided state by passing bipartisan legislation.
Right, the, the, whereas, you know, if I were to just put it crudely, right, um, Josh Shapiro didn't really have a super strong incentive to negotiate. with Republicans six months ago. His strong incentive was to do everything he can to make them look evil, right? To make them look obstructionist and to bolster the Democratic Party and for Kamala to win.
But the Republicans just won Pennsylvania, right? Pennsylvania is a lot redder than we thought. If Josh Shapiro's political career is going to be successful, the best way he can do that is to show that he would be the first governor in history. to get a bipartisan cannabis bill passed, right? Um, and, um, and then he could run for that on, uh, re election.
So, um, that's important. And then perhaps the most important thing, Tommy, is that Pennsylvania's neighbors finally have real cannabis industries. And so let's just kind of take this one by one. Right? Um, Ohio just started adult use sales in August. That wasn't really a part of the debate last year, [00:30:00] because they hadn't really started sales.
Now, Ohio, although it still has significant room to grow, has generated half a billion dollars in cannabis sales since it started on August 6th. So now you have Ohio, which is a real market. And again, I would just encourage anyone to You know, pick up a U. S. map and look how close Youngstown, Ohio, is to Pittsburgh, Pennsylvania, right?
They practically neighbor one another. So Ohio is open. And then I would say these other markets are now real markets. And you probably know this, Tommy, from all the work you do on the East Coast, right? New York is now a real market, right? New York could generate two billion dollars in sales in 2025. If anyone was looking at the New York sales numbers over the past Six to nine months.
They ramp significantly. So New York is now a real market and New Jersey, right? It's finally hitting its stride. It could hit one and a half billion dollars in sales in 2025 and again, just look at a map. Look at how close You know those New Jersey dispensaries are to Philly and it's funny. We're talking here Tommy Just a quick [00:31:00] anecdote that I thought was hilarious We're talking here kind of in advance of the Super Bowl as you may know the Philadelphia Eagles are in the Super Bowl I think it's hilarious, right, um, that a lot of New Jersey dispensaries are the official partners of a lot of these sports complexes in Philly that are watching the game, right?
There's this big sports complex in Philly called Xfinity Live, um, and they're partnering with dispensaries in Camden for this, right? So it just sort of like is a real illustration here. That, that's my final reason why I think it's more likely than not this year, right? So again, the presidential election is over.
They really need to, to, to make money in their budget. And whereas Pennsylvania's neighbors legalizing cannabis had long been a talking point, it's like, no, now these are real billion dollar markets. Whereas two years ago, Tommy, I think I would say to you, New York is an adult use market, but it's got like 10 stores open.
So it's not really an adult use market. Now, now it's got 300. And by the end of this year, it's going to have 500.
Tommy Truong: Yeah, it's, things are happening fast in New York. I want to, I want to talk [00:32:00] about, at the federal level, not, um, rescheduling, but the other, the other issues that we're fighting for. mentioned that things are going to be very difficult to pass Congress. Why?
Hirsh Jain: Yeah, you know, so, unfortunately, here's, here's the, the not so optimistic news, right? So we were talking about, hey, on rescheduling, right, maybe, um, you know, maybe we'll have a friendly DOJ, maybe Trump will lean in. But if you look at the leaders of Congress on the Republican Party, these folks are not, are not pro cannabis.
So, the Senate Majority Leader is a gentleman by the name of John Thune, um, who is the Senator from South Dakota. And, uh, he has long been very anti cannabis. I think one of the real tragedies of South Dakota not passing its Adult Use Initiative in November, is that, you know, I think many of us knew that John Thune was a very likely candidate to be Senate Majority Leader, and the fact that, um, that did not pass was, was problematic.
And so You know, I'll just say the very obvious thing that most people on this call know that in order to get a bill passed through Congress, um, the [00:33:00] Senate Majority Leader needs to put it on the floor, right? That's why we were so frustrated with Chuck Schumer over the past four years because he didn't put, you know, um, the Safe Banking Act on, on the floor.
So, there my very simple comment is unfortunately John Thune is anti cannabis and it really hurts that South Dakota did not pass this past year. The leader of, um, the House of Representatives, as I think most people on this call will know, um, is a gentleman by the name of Mike Johnson. Mike Johnson is a, you know, fairly conservative, religious, uh, Republican from Louisiana, which is not an adult use state, and so he is not pro cannabis, um, either.
And so So, look, I think we're living in a new world, right? I think Donald Trump will probably have more sway over Congress than any executive has historically had over a Congress, just given his larger than life presence. But any fair minded person would say, look, the people who you will need, right, to get legislation passed are anti cannabis.
And maybe as we think about What are the potential pieces of legislation that might get passed? You know, one that I'm sure everybody is sick of [00:34:00] hearing about is the Safe Banking Act. Right, which is now, um, I don't know, we've been discussing this for a decade and it has not been passed. You know, what I'll just say is in order for that to get, that to be passed, you need the cooperation of those leaders of Congress.
That's going to be tough. The other thing that, that we should understand is that, you know, the head of the Senate Banking Committee is a guy by the name of Tim Scott, who is a Republican from South Carolina. So just to connect this to what I was talking about earlier with state level progress, Tim Scott is anti cannabis, right?
And so he has a very limited interest in passing a banking bill through the Senate Banking Committee because he doesn't have any constituents that sell legal cannabis because you can't sell legal cannabis. Um, he has plenty that sell it illegally, of course, but he doesn't have any constituents that sell legal cannabis.
And so, The point there is, if you want to get Tim Scott to move, passing that medical cannabis bill in South Carolina this year would be a step. It's not going to make him a cheerleader for cannabis overnight, but you see the connection between state level progress and action there. So, that's safe banking.
And then [00:35:00] the other one I'll just mention briefly is the States Act, which we've talked about for years, too. I think that, you know, some people have, um, you know, sort of fantasies that that will be passed. I hope they're right, you know, because it's consistent with the Republican ethos of states rights, but I think that will also be a real uphill climb in this current Congress.
Tommy Truong: Oh, that sucks. That sucks to hear. Before I let you go, what's happening with the Farm Bill and hemp derived beverages?
Hirsh Jain: Yes. Um, so I think the, the farm bill, um, has been continuously punted, right? Um, so the farm bill will likely be resolved in late 2025. Um, and so I think you will continue to see the proliferation of intoxicating hemp products. Uh, across the country, and I think, you know, most people have, have noted that in many states this is really impacting adult use, you know, cannabis operators.
You look at states like Illinois, for example, that honestly should be generating much higher sales, but don't because of the proliferation of these [00:36:00] products. So that's, that's just a number one comment. I think we won't see this resolved towards the end of the year. Um, number two, I will point out. That, you know, the larger these industries grow, the more difficult it is to put the genie back in the bottle, right?
Um, the more jobs and economic activity that results from this, um, the more difficult it'll be to put the genie back in the bottle. So that's something we should be mindful of. But Maybe a couple other things that I'll say without getting too wonky. Um, there was recently a court decision that, um, basically gave states more power to regulate these industries, right?
And so it had long been the argument that like, hey, we passed the farm bill. The farm bill provides like blanket federal protections for these businesses. The ability of state legislatures to curtail or to restrict or to age gate these products is limited without, you know, making, getting too far into the law here, right?
Recent court decisions have given states more power to regulate these industries as we see fit. And so I think that might, [00:37:00] might be a clue to what we're likely to see going forward. And maybe the final thing is when this does get resolved, it is my opinion and I think the opinion of many that although there may be some intoxicating hemp products that do not survive this transition, um, in my opinion beverages are, are here to stay, right?
And I really think that the proliferation of hemp derived beverages in this country um, is really one of the most fascinating developments in cannabis. We could have our own episode on it. I'll just say the really obvious things. These products are growing, right, like crazy, which makes sense because this is a very familiar form factor.
If you look at the volume of cannabis beverage and hemp beverage sales in a place like Minnesota, like, it really is astonishing how, you know, 10 15 percent of alcohol sales, um, are to these hemp beverages. I think the public health argument for these hemp beverages is the strongest, whereas you can see a lot of scary stories about someone eating a really intoxicating hemp gummy, or, you know, this, this kind of flour.
Beverages are generally a substitute for a product that we know objectively is much [00:38:00] more harmful, which is alcohol. And so, from a public health perspective, it's going to be hard to make the case that this should be put back in. And finally, the alcohol lobby sees beverages as a product, a potential product in their portfolio, that can help plug the declining sales that they're experiencing, um, in, in other areas.
And so, I'll just say, maybe to summarize, it'll probably be towards the end of the year before we have clarity on the Farm Bill. You are likely to see states, you know, just as they do with cannabis, take their own tack, um, because of recent court decisions that allow them to do so. I think down the road you will see an effort to close, quote unquote, um, the loophole on, on some of these products, but I do think beverages is a category.
That will survive and I guess the final thing I'll say on beverages and I historically was a skeptic of beverages because it's not the way that that I consume as as much right and I, you know, and I think many of us who are longtime cannabis consumers were skeptical of beverages for that reason. I guess what, the final thing I will say is, what has surprised me is how [00:39:00] enduring the stigma against cannabis is, right, it is still, and maybe it shouldn't surprise me, but it is amazing to me that, you know, I'm, I'm still hearing the same arguments I was hearing seven, eight, nine years ago, that I think are not grounded in science, and perhaps beverages can be one way that we can overcome that stigma that seems so deeply embedded in the American psyche, um, against THC, and so, Um, the adoption that it creates may warm people up to the idea of THC generally, and we need that to happen, and so that's, that's why I'm excited about this
Tommy Truong: Yeah, I think beverages are the future of consumption languages.
Hirsh Jain: Totally. Concerns, too, right, um, right, uh, especially like active, you know, outdoor kind of public consumption, uh, without question.
Tommy Truong: Yeah, nano infused THC, sign me up.
Hirsh Jain: Yeah, totally. There's, you know, it's such a competitive category, but there's so many great brands out there. So I think the tough thing for these businesses will be figuring out how you win in this [00:40:00] very competitive category.
Tommy Truong: Hirsh, thank you so much for providing clarity in this time of, of need. Is there anything that, uh, we didn't go over that you feel our listeners should know?
Hirsh Jain: Um, Maybe I'll just say, uh, that I think it's interesting that some of the most robust, stable cannabis markets right now are in red states, and I'm hoping that that can help our political culture on cannabis evolve. I think the best example of this is a state like Missouri. a very, you know, red state, um, that has a robust and a continuously growing industry.
There are even smaller examples of this, a state like Montana, which is only a state of one million people, but, you know, Tommy manages to do more than 300 million dollars in sales each year. And so, these are states that never would have passed cannabis if it were not for a ballot initiative process, right?
That process passed, and the industries that developed. where have been a little bit lighter touch and perhaps that can tell us something as we seek to regulate these industries in [00:41:00] a smarter way going forward. Yeah,
Tommy Truong: it's, it's inevitable. I, I was talking to somebody that, uh, had a prediction that it's just how many, political cycles it'll take before things eventually get, get, uh, I guess, rescheduled and ultimately unscheduled or descheduled.
Hirsh Jain: totally. And I think the thing we have in front of us are those, those six states that I mentioned earlier. What are the two states where we could pass adult use and the four we can pass medical? Um, that won't get us where we want to get to, but that will help grease the wheels of progress because right now we're kind of floating in no man's land and we need to regain some momentum and I think that can help us get there.
Tommy Truong: How can our listeners find you? I'm sure that everybody wants to be plugged in on what's happening and things are happening so fast, where can people find you?
Hirsh Jain: I'm pretty active on X, formerly known as Twitter, um, where I am constantly posting my thoughts on cannabis news and [00:42:00] policy, so if you want to, um, sort of get a preview on what I'm thinking about on a minute to minute or hour to hour basis, you can follow me on Twitter. Um, Ananda Strategy is my handle, that's A N A N D A Strategy, Ananda Strategy.
Um, you can also follow me on Instagram, um, same handle, Ananda Strategy, or, um, Send me an email at Hirsh at anandastrategy. com, which is also my website. So, um, any of those ways.
Tommy Truong: Thanks Arsh. Thank you so much for coming on today.
Hirsh Jain: Thanks, Tommy. Enjoyed it.
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