TWICL ( May 1, 2026) - Cannabis Rescheduling: What We Still Don't Know

It's been one week since cannabis rescheduling to Schedule III was announced — and the questions keep multiplying. Jay Rosenthal, Marc Hauser, and Ben Larson unpack the real-world implications for operators, lawyers, accountants, and states navigating this seismic shift.

In this episode:

• The DEA registration question: does it matter for 280E relief?
  
  
• The "Schrödinger's Cannabis" problem — how the same product can be Schedule I and Schedule III simultaneously
  
  
• State-level ripple effects: South Carolina, Nevada, Indiana, Texas, and more
  
  
• The 60-day application window and what it means (or doesn't)
  
  
• Congressional pushback: an appropriations bill that could defund rescheduling?
  
  
• Political dynamics: Trump, Kim Rivers, and the hemp connection
  
  
• 4/20 data: pre-rolls dominate, infused pre-rolls surge nationally
  
  
• Plus clips from Mike Feldman (NABIS General Counsel) and Rick Bashkoff (Lit Alerts) on what rescheduling means operationally and at retail.
  
  

Hosts:

Jay Rosenthal, Cultivated
Marc Hauser, Cannabis Musings
Ben Larson, High Spirits

Streamed live May 1, 2026
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Transcript

Welcome And Quick Framing

SPEAKER_03 0:11

Welcome to This Week in Cannabis Live. I am Jay Rosenthal. That is Mark Hauser, and that is Ben Larson. Um we are coming at you live on this Friday. It's noon Eastern here on the East Coast. It's 9 a.m. Pacific on the West Coast. And if you're in somewhere in the middle, it's probably somewhere in the middle. Mark, Ben, welcome. Good morning. Yeah, we're gonna have plenty of time to talk. So uh, because we are uh some of the big mouths that we share this screen with sometimes won't even be here, so we can just hog up all we want. Just kidding. Um, it's been one week, roughly, since rescheduling was announced of medical cannabis. Um, we know everything we need to know now, right, Mark? Right, Ben? Like all the questions have been answered. All right, yeah.

Ben Larson 0:56

I I feel like it's like uh a mythical beast. You chop off its head and two more grow in its place. And um yeah, I I I've entered into many conversations this week, asked a lot of questions, got a lot of answers, but always coming out with more questions.

SPEAKER_03 1:13

I want to ask a question. Were those answers firm answers, or it could be this? On the other hand, it could be that.

Ben Larson 1:20

It was firm opinions.

SPEAKER_03 1:25

And Mark, what about you? You're a lawyer.

The DEA Application Catch 22

SPEAKER_04 1:27

I I feel like this is like we we all like you know, like got the monkey's paw and we asked for, you know, wish, but then you know, it was the wish was granted, but it was one of those ironic, you know, wish grants so that like you know, everything that was bad, you know, is good, but it was really bad underneath. Um, or it came with all these sort of like like you know, uh you know, it's all sort of ugly. Um because yeah, I think the you know the consensus among the you know my peers in the cannabis bar is that there's no definitive sort of certainty as to what a lot of this means, how to sort of move forward on it. Uh and but yeah, I I agree with Ben. That's a good way to put it. There are a lot of opinions, um, but no very little certainty.

SPEAKER_03 2:21

And there is an uh Ben, you we were talking before we went live. There's an application process live, I guess, on the DEA's website. If you are a state licensed dispensary operator, the one thing I know about it is that you unbelievably have to pay for the fee with PayPal, which I don't know if they think that is like a a nod to uh Elon Musk or something. But um what is that application like? And is anybody filling it out? What is your sense? Because you don't fall into dispensary category, but would fall into other categories. What what do you know?

The 60 Day Window And 280E

Ben Larson 2:54

Well, we we quick quickly reviewed it with the team, and I think one thing stands out is that it asks if you or any of the operators have been involved in the sale of Schedule One substances. So it's like this immediate cash 22. It's like, yes. Um, but then the subsequent confusion around, well, what if we are in a state like California or any of these uh states that have medical and adult use that have kind of been pushed together? You know, like how do we divide those those supply chains, or do we have to? And I think that's where the largest questions uh occur. Um coming out of this, I I feel like I I guess I'm a little bit more in a settled place. Like we have, yes, this like 60-day period to get an application in if they ever become available for a company like us, and so it's like there's a little bit of hurry there, but the rollout and impact of all this uh is what's unforeseen, right? How are the states going to adapt? How are all the regulatory structures gonna adapt? And you know, will the MSOs actually allow interstate commerce and blah blah blah blah blah. So it's like it's like quick get an application in, but don't change the business plan immediately.

SPEAKER_03 4:05

And and Mark, last week we had Eric Berlin on from Denton's and and he, I think he called it clever lawyering, um, about how the the um how it was written, what we could read at the time, but it sounds like implementation not has fallen short, but there wasn't as much thought given to like how this would roll out and all the downstream ramifications of what it would mean to an operator like Ben or like uh someone operating uh on the medical and adult use side in a state like California or Massachusetts or anything like that. Like, is that how you've interpreted the past week as well?

SPEAKER_04 4:39

Yes. I mean, even even just that 60-day window, you know, what's the meaning of that? You know, what if you don't? I mean, it it doesn't seem like you're not it it doesn't suggest that you're not allowed to register after the 60-day period is ended. It just means that you're in this sort of like weird grace period, but uh it does it matter, you know, we don't know. And you know, it's are they gonna enforce that? We don't know. And you know, and and it's again, I think it's still where until we see more guidance from like the IRS, we don't know is DEA registration required in order to get the benefit of being of being selling schedule three uh cannabis for Twity purposes, or is that not required? Because if you read the schedule, the schedule doesn't actually refer to uh DEA registration and the sell bite process, which is weird. Um and what do you do? Uh you know, or even just a little thing about how is the how is that bite sale process actually gonna happen? You know, the the thought is that it's gonna be perfunctory, but right, you know, but again, what what does that look like? And um what does the audit look like? You know, the DA is gonna have audit rights, you know, all this stuff. We know, you know, it's sort of like we we don't know.

unknown 6:07

Right.

State Schedules And Ripple Effects

SPEAKER_04 6:07

So I think that's why, oh, I'll just add, I think that's why a lot of companies, especially ones that are under 25 million revenue and are therefore, you know, sort of probably uh accounting under 471c, which is sort of a way to shove a lot of stuff into cost of goods sold. Um, so that 280E isn't really currently as impactful for them. You know, the the the I think a lot, I think a number of them are probably waiting and seeing rather than jumping right in because there's such an unknown.

Business Value In A New Lane

SPEAKER_03 6:41

Yeah. Yeah. So so it unlocked a lot of unknowns. What I didn't know, and I think probably you and Mark did, Ben, um, is that uh states often mirror uh their sort of schedules of drugs, and it um some of them need to take action to either keep it on the schedule, depending where they are and what their rules are, but like South Carolina needs to address medical cannabis now because it is now a Schedule III drug from the federal government. So they need to do something. I think Nevada was another state that had some implications of had to follow, you know, they follow the federal guidelines as well. I didn't know that that was the case. I assume people who are lawyers did, but it is interesting to see the downstream ramifications. And we covered a lot of states this week that are just looking at it because they want to know what the ramifications are, whether it's North Carolina, I think Wisconsin's thinking about it, Louisiana wants to pass a bill where you can't smoke or vape within a thousand feet of a college or university, which uh limits most of all of uh New Orleans. So that like there are lots of downstream implications that I think a lot of both companies wherever they are in the supply chain and states are thinking about now that they didn't have to before.

Ben Larson 7:52

Yeah. Yeah, I was also intrigued by by Eric Berlin's uh commentary on your guys' show uh last Friday, or this show, I guess. Uh, and and so we wanted to dig a little bit deeper. We had him on high spirits, and yeah um, you know, if if if I'm reading between the lines, he's almost looking at this period as like, yeah, history is what it is. This is kind of the new trajectory that is being set. And there was some mentions of like, take a good look at your business and how you might adjust it to address this opportunity, and then kind of laid out what his beliefs were, the intentions and the eventual outcomes of of this order, right? And so it is a little it's a paradigm shift in a big way, more more so than just the the complexity of the division. It's just like you know, what is the this being a relatively clean slate, what's the opportunity to build value in this new infrastructure?

SPEAKER_03 8:47

Yeah, it seems to me, Mark. I think you said this last week that for lawyers and accountants, it's gonna be, or maybe Eric did, it's gonna be a really good year.

SPEAKER_04 8:58

Yeah, I refer to it in my musings as a government sponsored, sponsored um pension plan for lawyers and accountants. I mean, it it's like yeah, like they need it. Yeah, no, I you know, and I think that um I I'd agree with it, you know, I I I'd agree with that sentiment, Ben, and I think that um it's a the it's not gonna change back unless you know though there is an effort in Congress to actually sort of stifle this, but um but you I I I don't think it's gonna change back, and so it you but uh you know we do want to try to take advantage of this as best we can. It's just I think the frustration is is that nobody is really certain on uh how you know yet. But again, it's all been all of a week, and I think once we see some more guidance from agencies and see how this plays out, then you know, then I think people will be able to more definitively and comfortably sort of take action.

Election Politics And Funding Threats

Ben Larson 10:01

I'm yeah, it's gonna be pretty difficult to put it back in the bag because what is the evidence to show that there is not a medical application of cannabis, right? It's like a litany, as we've all identified over the last decade, of like all these different studies that our government studied. And this has been a multi-administration effort to prove that there is medical applications of it. So it's I think it's here to stay, you know, will it get gummed up because like Sam jumps in and files lawsuits? Yes. But yeah, it's hard to imagine it get getting rolled back at this point.

SPEAKER_03 10:34

Pause that thought for a second because what we just had on stage was on stage on screen was a story from today, which was um uh sort of a um uh in a bill from the uh appropriations subcommittee on commerce, justice, science, and related agencies. That's a huge mouthful that puts that that wants to stop any funding to go to anything related to rescheduling. And I say that not that this is gonna get attached to a bill and passed, but we are in the rescheduling uh uh happens in the context right now, what we're sitting May 1st, in the context of a very heated political campaign in November. Um while I think this could cut both ways, I think some conservative Republicans think it's gonna cut their way during their election. Um, and bucking the president in this particular way might they might have a little bit of leeway and might actually gain curry favor with some of the people they're trying to attract to their campaign. And I do think that we will see more of this sort of political positioning, even if it's not likely to pass. Um, but people taking stands against this uh and having a platform to do that. Um, I wonder if you heard any of that in your talkings this week.

SPEAKER_04 11:46

Yeah, I mean, I think this is where, you know, the um the this this is how you this is how you stop the process is it's not, you know, the whether or not it's it's me it's there are health benefits for it, uh, is more for I think for the administrative law process. This is just purely about drugs are scary. And um, but you know, the the the what we have here though is a situation where they, you know, if you've got this attached to a bill, is that something that Trump's gonna sign? Or is he gonna um say, you know, I I'm not gonna sign something, I'm not gonna sign a budget uh bill that uh that has this, um, because this is something I've done. Or does he sort of is this uh 3D chess? And this is a way that he sort of got to do something. I I'm uh this is a conspiracy theory here, so I'm throwing this out here. But you know, maybe he is gonna let that play out and say, I tried, I tried to give you can, you know, schedule three cannabis, but you know, Congress spoke. I don't know. Maybe that's maybe that's a little too um uh uh uh too deep.

SPEAKER_03 13:04

Well, I I I don't know if it's too deep, but um undoing something that actually did happen in Congress would be shocking because I don't the political machinations of DC are not the administration's strong suit. They're more of a let's bulldoze um and and ask questions later. The problem is if it actually does get attached to a bill, like he's gonna have to sign it or not sign it. And if it's a big, beautiful bill, which unbelievably is what the last one was called, like is there gonna be some mention of something that the cannabis industry thinks sucks, but the rest of the bill is beautiful, right? Like who there's no way of knowing.

Ben Larson 13:41

I think what we also have to acknowledge is what is who is uh attached to this effort, right? And uh Kim Rivers and and True Leaf have have made no secret about their their friendliness with the president, uh, the so-called Trump whisperer, and the their propensity and history of putting dollars in in Trump's pocket. So uh if he wants to see that continue, which I'm sure it would if this came into question, uh I'm I'm pretty sure that he would lay down the law and make sure that he got his wish on this one. Um and pretty quickly after it, you know, he got got straight onto the hem conversation, which is I don't know if it's related in his mind, but it's definitely related in all of ours. Yeah.

SPEAKER_03 14:21

It has been an interesting um week and not unusual in an industry, any industry, that something major happens in DC, and the next week, two weeks, months, years are left unpacking sort of the ramifications of it. That's that does happen in every other industry. It just seems um big here because it was earth-shattering, right? It is it is a major paradigm shift. And so a paradigm shift has bigger implications, but there are ramifications in other industries too with things that happen in DC. It just seems monumental for us.

SPEAKER_04 14:54

Well, and usually the difference too, though, with other industries is that you have um insiders and lobbyists, for better or for worse, helping to draft the policy and helping to draft the regulations so that they are understandable and you know and and reliable. And here you we don't have that. Yes, except you don't have the benefit of that.

SPEAKER_03 15:17

Except, and maybe this is a little bit what Ben was saying, except if you are a medical-only operator in a major billion, you know, multi-billion dollar state of cannabis, of which there are not that many, there's maybe two, maybe three. Um it's it's that bifurcation helps some more than it certainly helps others.

Ben Larson 15:38

Yeah, I I think the big question was is like for the more progressive states that have con beyond medical, how quickly are they to realize what this all means and what mechanisms do they have to adjust to make it workable in the state? You know, can we have a definitive medical lane in California? That's what we're trying to figure out, like literally right now.

Compliance Lanes And DEA Inspections

SPEAKER_03 16:02

Right. And just a note, and and we'll have more of this next week, but Verano had their quarterly earnings call this week and did separate out their adult use from their medical um revenue. So it is interesting to see that. I think we'll see more of that. So investors and us can see, you know, what is the breakdown of medical versus adult use? And will they seek, you know, will there be tax benefits to having more on the medical side of things versus the other? Uh, we shall see more of that as well. Anything that is like, what is one big hairy question you need answered, Mark, and you need answered Ben? That I don't know if we'll we'll get there in the next week, but like if you knew this one bit of information, what would it unlock? What would it be and what would it unlock?

Ben Larson 16:46

I'll go ahead and start. Um one, how to apply uh as a non-dispensary owner. Uh two, have I indeed sold schedule one drugs in the past? Um and and three, like, you know, how do uh how does Canra and CANRA has their external stakeholder event coming up uh this month, um, or maybe it's next month. So it'll be interesting to think how the collective regulating bodies and and states uh are thinking about adjusting to to support, hopefully, cannabis businesses in this kind of paradigm shift.

SPEAKER_04 17:25

Hmm. Mark? Um, I want to know for sure what's the difference between um being a TEA registrant and not for purposes of medical, stamp licensed medical cannabis. We all have our interpretations of what it means, but we don't know for certain what it means. Yeah, yeah.

Red State Demand And Medical Expansion

Ben Larson 17:47

But Mark, Mark, you you brought up an interesting point about the the DEA uh inspections, right? That oversight. And so immediately because of that, I am regardless of the uncertainty around everything, very much thinking of this as like distinct lanes, similar to how we were already thinking about hemp and cannabis, right? It's like if you if and when you do have a DEA inspection, what do you want them inspecting? Do you want there to be any grayness in between your supply chains or your facilities? And so it's like definitive facility, definitive, you know, books, um separate entities, all that kind of stuff. Um that's how we're actually at least thinking about it.

SPEAKER_03 18:26

Um there was some interesting uh uh sort of we're talking about downstream. There were stories both from Indiana and Texas this week, or to yesterday, um, about um one, Indiana, the there's a movement to say, look, our I think it was like over but maybe two billion dollars of cannabis was purchased by Indiana residents in other states. Uh so like there's some pushback there, like, wow, we ought to be seeking some of that tax revenue if we could do something even medical here in Indiana. And the other was that an overwhelming majority of Texans believe that medical cannabis should be legal and and the program should be uh more robust. And the polling was done by the president's uh pollsters, apparently. So there's some interesting, you know, the Trump effect in some of those states might actually move some states to either more robust or or open up their medical programs. We shall see. I have no predictions on that. Or not, right? I have no predictions on that.

Schrodinger’s Cannabis And Logistics Reality

SPEAKER_04 19:21

Yeah, just because the you know, just because it's popular doesn't mean squat.

SPEAKER_03 19:27

That's true. That's I'm gonna I'm gonna clip.

SPEAKER_04 19:30

When it comes to drug policy, I should say when it comes to drug policy, certainly.

SPEAKER_03 19:33

I'm gonna clip that because that is a that's that is a truism there. I want to share oh, I want to share one thing. We had on the um general counsel of NABIS, which is a I guess a logistics company, delivery company on the wholesale side of things um in cannabis. This is the biggest what Mike Feldman had to say uh about Schedule One, Schedule Three, and the rest.

SPEAKER_00 19:52

Shrouding their cannabis because it really is. It just it's both schedule one and schedule three at the same time. It's a bizarre outcome. And I think there's some very interesting operational questions and logistical questions.

SPEAKER_03 20:07

That's from a new series where we've launched called Rescheduling What's Next. But it was interesting to talk to him about what it means to their business, but also they're unpacking the same thing that it we're unpacking on the show, with you know real implications for their business uh and benefits potentially too, which is interesting. I want to shift one more.

SPEAKER_04 20:22

Go ahead, Mark. Oh, I was just gonna make a joke that I've uh for years I've written that cannabis is um has a quantum physics problem that it's both you know illegal and illegal at the same time. Um just like a you know, a a particle is or light is both a wave and a particle at the same time. Um, and uh, or I guess a photon, if I'm getting that right. Um, and so uh, you know, so it's got this. So I mean, he makes the same point that cannabis is now schedule one and schedule three at the same time, and you don't really know until you open the box and see if the cat is dead.

420 Winners And The Pre Roll Boom

SPEAKER_03 20:57

Well, he also uh referenced, you gave a hypothetical where a granddaughter comes from Nevada to California, where her grandmother is a medical cannabis patient, but the the woman from Nevada can't actually get medical cannabis in California and they buy from the same place, buy the same product. This was Schrodinger's cannabis, and that one is you know, schedule three, the other is schedule one. It's it's a uh it is the the we will find we the ramifications we will know for some time, unless or until the June and July sort of hearings, you know, the whole kit and caboodle, and then we can unpack that for months. Um, one last bit we had on um our show Rick Bashkoff from Lit Alerts talking about winners and losers, not many losers, around 420. But uh, he did have this to say, and we could talk about sort of the prevalence of pre rolls and as a category.

SPEAKER_01 21:46

Pre rolls was definitely the winner. Take share from mostly vapes and concentrates. Edibles and flowers held up pretty well, particularly within pre roll. Again, this is not a 420 trend, this is a national trend. Trend infused pre-rolls becoming much more popular. We're seeing more and more pre-roll companies release those SKUs. And that was definitely a heavy portion of the new drops and specials were around infused pre-rolls. People love their convenience. And I think that when retailers are looking to move those convenience products, pre-rolls seem to be the easiest one.

SPEAKER_03 22:23

I thought that was interesting insight. And uh we have, of course, seen it in some of what we've reported from from Lit Alerts. But any surprises there, Mark, Ben?

SPEAKER_04 22:33

No.

SPEAKER_03 22:35

Yeah, people love their pre-rolls. And I I think I referenced this uh when I was talking to him earlier in the week, is that even in 2016 when or 2017 when Canada was about to legalize, 2018 when it did, I had an interview with a CEO who I said, well, where are you right now when I'm interviewing you? He said, Well, it's all hands-on-deck to get as many pre-rolls out the door on legalization day because there's an insatiable appetite for pre-rolls. And that was during the medical program here in Canada. And certainly it's gone up since then and and an ever increasing share the convenience factor. And I think it also coincides with just better quality on the pre-roll side. But yeah, interesting. And then infused pre-rolls, I think in Nevada, I've there's like a whole board dedicated to the dispensary I go when I'm in Nevada. It's like only infused pre-rolls you can get.

Ben Larson 23:17

Yeah, it's a big, big, big section of the pre-roll category in California as well.

SPEAKER_03 23:22

Yeah, yeah. Well, Mark and Ben, we we did this all by ourselves.

Ben Larson 23:27

That's pretty amazing. There you go.

Closing Notes And MJ Unpacked

SPEAKER_03 23:30

It's pretty good. We also made it to May, so thank you for making time today uh in the morning, both of your times, and uh the afternoon here in Toronto. Uh Mark, Ben, thanks for joining us, and we'll be back next week. Thanks, everybody. And actually, sorry, one programming note. If you're gonna be at MJ Unpacked in Atlantic City, I will be there Tuesday, Wednesday, Thursday. Uh, we're having a breakfast Wednesday morning. Read one of our newsletters to find out how to get there. But we look forward to seeing everybody in the New Jersey, Maryland, New York market who will be in Atlantic City. Uh Mark, Ben, thanks again. We'll see you next week.

Ben Larson 24:01

Thanks, everyone.

SPEAKER_03 24:02

Bye, y'all.