On A Mission For Justice: Cannabis Industry Connects In Chicago
Todd Harrison, founder of CB1 Capital, longtime cannabis market analyst and author of the “Cannabis Confidential” newsletter, shares his reflections from the 2025 Benzinga Cannabis Capital Conference in Chicago and his outlook on the sector’s future.
The cannabis sector is enduring its fifth year of a brutal bear market.
Besieged by a litany of issues ranging from The Great Hemp Bogart to uncertain tax provisions, capital market, custody and U.S. exchange bans, and a grizzly mix of debt obligations and stagnant growth, it’s been… tough
The punch line is that THC and cannabinoid consumption is far from stagnant; it’s just bifurcated across two uneven channels.
State-legal markets are required to test and regulate cannabis, while hemp operators (often synthetically) modify cannabinoids to create an intoxicating effect.
The category as a whole is exploding—if there wasn’t 100% growth across both channels the last few years, it’s close—but the federal inconsistencies are maddening.
The issues are solvable, just not immediately, or all at once.
Hemp: The eyes of the nation are on Texas, where the governor has 11 days to veto the hemp THC ban and/ or the TECUP expansion of MMJ qualifying conditions or they’ll become the law of the Lone State land.
If/ then, Texas would become the standard for cannabis bifurcation, with hemp used for everything from textiles, paper, building materials, cosmetics, mulch, compost—the list goes on—while intoxicating cannabinoids (cannabis) is regulated and tested.
It’s not just Texas—a host of other states have taken steps to address the 2018 Farm Bill loophole, and the language in the current version of the House appropriations bill contains a provision that would federally ban hemp-derived THC, too.
Whether that language survives the full House, much less the Senate, is unknown but if the first half of 2025 was radio silent on cannabis proper, the opposite can be said regarding the activity surrounding intoxicating hemp.
I don’t know where this lands but when we read about the legalization of cannabis in the history books, the emergence of hemp-derived cannabinoids, intentional or not, may be viewed as the un-gating catalyst.
Uncertain Tax Provisions (UTP) was another hot topic in Chicago, as most operators have stopped paying 280E.
Schedule III, once published in the Federal Register, will stop the clock for the calendar year (which we still believe will be 2025).
There’s a school of thought that the 280E tax clock stopped when the 252-pages of medical evidence was submitted by the HHS in the Summer of 2025.
Beyond that, David Boies may soon have the opportunity to argue before the Supreme Court that U.S. cannabis can claw back 280E to the statute of limitations.
Capital markets, custody, and exchange listings—the Holy Trinity for U.S. cannabis investors—will require congressional action, starting with SAFEST banking, which has been pledged by President Trump and signaled by congressional Republicans.
This legislation, along with the already introduced STATES 2.0 and PREPARE Act, will ride or die with President Trump.
There is obvious skepticism given the lack of action to date, but efforts and energy are being expended behind the scenes.
In terms of looming debt maturities and funding constraints, we expect the winners and sinners will continue to separate, not unlike …