🌿 DEA rescheduling hearing draws criticism, U.S. cannabis industry workforce shrinks, and restaurant association opposes THC ban

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:

…and more. Let’s get to it.

Was this email forwarded to you?

Rescheduling resistance. The Drug Enforcement Administration’s (DEA) upcoming cannabis rescheduling hearing is drawing criticism after the agency limited participation to parties opposed to moving cannabis to Schedule III, excluding advocates and stakeholders who support reform.

The following were selected to participate:

According to NORML, organizations representing consumers and the regulated cannabis industry were denied “interested person” status, while the DEA approved participation from anti-rescheduling groups, state law enforcement entities, and prohibitionist advocates. Critics argue the decision creates a one-sided evidentiary record at a pivotal stage in the federal rescheduling process and raises questions about the fairness and credibility of the hearing.

The hearing, scheduled to begin June 29 in Arlington, Virginia, is part of the DEA’s renewed review of whether cannabis should be transferred from Schedule I to Schedule III under the Controlled Substances Act. The proceeding follows the Department of Justice’s April 2026 order that already moved state-licensed medical cannabis and FDA-approved cannabis products into Schedule III, while leaving adult-use cannabis federally illegal.

The broader hearing will consider whether all cannabis should receive the same classification, a move that could significantly expand research opportunities, reduce federal tax burdens under Section 280E, and further align federal policy with state cannabis programs. The DEA has indicated the hearing will run through mid-July as part of an expedited rulemaking process.

For the cannabis industry, the exclusion of pro-rescheduling voices introduces new uncertainty into a process that many stakeholders viewed as a pathway toward broader federal reform. While the hearing remains a key milestone in determining the future federal status of cannabis, the participant list has intensified debate over whether the agency’s review will fully reflect the perspectives of patients, consumers, businesses, and public health experts.

Labor lull. The U.S. legal cannabis industry has recorded its first ever contraction in employment, marking a significant shift after years of steady growth. According to a recent report, the sector employed about 412,500 people in early 2026, down roughly 2.7% from the prior year, as operators across cultivation, manufacturing, and retail cut staff in response to worsening economic conditions.

The decline comes alongside the industry’s first year-over-year drop in national retail revenue, highlighting broader structural pressures including oversupply, price compression, and tightening margins.

Analysts note that while demand remains relatively stable, consumers are spending less per purchase, squeezing profitability for operators and accelerating consolidation across mature markets.

The report suggests the industry is entering a more mature, efficiency-driven phase, where larger operators are better positioned to absorb cost pressures while smaller businesses face ongoing strain and workforce reductions.

Beverage battle. The National Restaurant Association, the largest foodservice trade association in the world, is urging Congress to delay an upcoming federal ban on hemp-derived THC beverages and instead create a clear national regulatory framework to ensure product safety and support restaurants that serve them. The pending federal ban is set to take effect in November 2026.

In a letter to congressional leaders, the association emphasized that low-dose THC drinks, produced under the 2018 Farm Bill hemp definition, are increasingly in demand as alcohol alternatives, particularly among younger consumers, and are already being adopted by a growing share of restaurants.

The group is calling for standardized national rules covering age verification, labeling, dosing, quality controls, marketing, and impairment standards, while still allowing states and localities flexibility in implementation similar to alcohol regulation.

The NRA also framed the issue as one of economic stability for an industry operating on thin margins, warning that an outright ban would eliminate a significant new revenue stream and disrupt operators who are beginning to integrate these beverages into their offerings. It suggests that the category represents a rapidly growing and potentially $1.6 billion market opportunity for restaurants.

Alabama: The first medical cannabis dispensary opened in Montgomery after years of legal and licensing delays, marking the start of patient access in the state’s long-delayed medical cannabis program.

Connecticut: The state has entered a cannabis compact with the Mashantucket Pequot Tribal Nation, establishing a coordinated regulatory and enforcement framework that allows the Tribe to fully govern cannabis activity on its lands while aligning with state standards on safety, taxation, and more.

Kentucky: Governor Andy Beshear is ending the temporary policy that allowed medical cannabis patients to bring in products purchased out of state because the state’s own medical cannabis program and in-state dispensaries are now operational enough to meet patient needs.

Nebraska: Regulators have authorized the state’s first licensed medical cannabis cultivator to begin planting marijuana, marking the start of legal in-state medical cannabis production.

SNDL stares down regulatory stress

The Canadian cannabis company is facing pressure from regulators to unwind its Ontario retail network over concerns about its control structure, a move that has already contributed to the collapse of its planned acquisition of 27 stores and threatens further disruption to its retail expansion strategy in the province.

Looking to get your business or brand in front of cannabis enthusiasts, entrepreneurs, and executives?

Email us here to learn more!

Stay tuned for more cannabis industry news next week!

💚,

The Pre Roll Team

*Did someone forward you this newsletter? Sign up here.