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🌿 Cresco to leave California, lawmakers propose DTC model, and rescheduling reclaims the spotlight

Welcome to another edition of The Pre Roll, the cannabis newsletter that keeps you up-to-date on the industry happenings you need to know. Here’s what we’re rolling up this week: Cresco to leave California, lawmakers propose DTC model, rescheduling reclaims the spotlight, and more. Let’s get to it.

Author

Alex Lipnik
July 25, 2025

together with

Happy Friday Pre Rollers! Welcome to another edition of The Pre Roll, the cannabis newsletter that keeps you up-to-date on the industry happenings you need to know.

Here’s what we’re rolling up this week:

  • Cresco leaves California

  • Lawmakers propose DTC model

  • Rescheduling reclaims the spotlight

…and more. Let’s get to it.

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🚨 ROLL CALL
Business

Up and leave. Cresco Labs, one of the largest cannabis companies in the United States, intends to exit the California market. As part of the move, it will sell its California cultivation, manufacturing, and select distribution operations. Conversations with prospective buyers are ongoing and are expected to be finalized over the coming quarters.

“Capital is increasingly precious in this environment, and our focus is on deploying it where it earns the strongest return. While California is the largest cannabis market in the world, the structural challenges—ranging from fragmented retail to price compression and the illicit market—combined with our lack of scaled footprint in the state, make it extremely difficult to generate sustainable profitability. Exiting California allows us to reallocate capital and resources to our core markets and build out new markets where we see clear pathways for growth and shareholder value.”

Charlie Bachtell, CEO and Co-founder of Cresco Labs

The decision was made in an effort to strengthen its balance sheet, increase cash flow, and prioritize markets with the highest margins and long-term growth potential.

Policy

Source: Madeline Monroe / The Hill & Matt Rourke / AP Photo

Intrastate and interstate. Representatives Jared Huffman (CA-02) and Val Hoyle (OR-04) have introduced a bill to enable small cannabis farmers and producers to ship their products directly to consumers within and between states where cannabis can be legally sold using the United States Postal Service or any private or commercial interstate carrier.

“Nearly 15 years into the experiment of state-level cannabis legalization, the cracks in the system are clear: small and craft producers are being pushed to the margins, safe access for consumers and patients is shrinking, and the industry is consolidating into the hands of a few. Without direct-to-consumer shipping, federal cannabis legalization risks reinforcing these failures instead of correcting them.”

Ross Gordon, Co-Founder at National Craft Cannabis Coalition

The Small and Homestead Independent Producers (SHIP) Act is aimed at helping these small businesses compete against larger commercial operators.

Policy

Twists and turns. The rollercoaster ride that is the ongoing cannabis rescheduling process had a few more ups and downs this week.

Early in the week, President Donald Trump’s pick to head the Drug Enforcement Administration was confirmed by the United States Senate. DEA veteran and former top public safety official in Virginia Terrance Cole will now play a leading role in managing the delayed process.

When testifying before the Senate Judiciary Committee in April, he said reviewing the cannabis rescheduling process would be “one of my first priorities” if confirmed. Despite the encouraging urgency, he would not commit to supporting the proposed rescheduling and moving cannabis to Schedule III under the Controlled Substances Act.

A day later, DEA Chief Administrative Law Judge John Mulrooney II, who was overseeing the process, disclosed he is retiring on August 1. This leaves no judge assigned to the stalled cannabis rescheduling hearings and transfers ultimate responsibility for the proceedings to new DEA Administrator Cole.

It remains to be seen what impact these major changes will have, but it may mean there will be movement one way or the other on rescheduling in the coming months.

Former President Joe Biden originally initiated the rescheduling process in October of 2022.

🇺🇸 STATE OF THE INDUSTRY

Florida: A recent poll reveals a majority of registered Republican voters oppose a potential 2026 ballot amendment proposal to legalize recreational cannabis.

Massachusetts: Adult‑use cannabis operators have surpassed $8 billion in cumulative gross sales since legal retail began in 2018.

Missouri: Regulators are retroactively completing background checks for 16,000 cannabis workers after a two-year lapse.

North Dakota: The state’s medical cannabis program will soon implement a series of changes under new legislation including the addition of THC edibles, expanded telehealth eligibility, and two-year card renewals.

Rhode Island: The Cannabis Control Commission has paused issuing new licenses to hemp‑derived THC businesses pending a state‑mandated regulatory study.

đź’Ľ BUSINESS

Trulieve bets big on beverages

The Florida-based vertically integrated multi-state operator announced expanded distribution of its Onward THC cocktails and the launch of its new Upward THC energy drink.

🌏 AROUND THE WORLD

Turkey: Parliament has approved legislation allowing low‑THC cannabis‑derived medical products to be cultivated, processed, and sold through licensed pharmacies.

đź’¨ QUICK HITTERS

  • Residents in Eden Prairie, Minnesota can submit name ideas for a city-branded THC gummy being created by the municipally-operated liquor store chain.

  • Klutch Cannabis is set to open its flagship dispensary in downtown Cleveland in the historic former Record Rendezvous space famously linked to the birth of rock and roll.

📚 WHAT WE’RE READING

  • Big Alcohol prepares to fight back as buzzy cannabis drinks steal sales (Reuters)

  • Ban or regulate THC in Texas? State lawmakers still can’t agree on what’s next (Houston Public Media)

  • Mass. lawmakers weigh competing bills on cannabis advertising requirements (CommonWealth Beacon)

📽️ VIDEO OF THE WEEK
🔎 JOB BOARD

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