Author: Blank Rome LLP

2025 Wrap-Up: Historic Cannabis Rescheduling

Post author By Blank Rome LLP
Post date January 2, 2026

Blank Rome’s Cannabis Practice Applauds Milestone EO and Anticipates Continued Developments and Opportunities in 2026

Frank A. Segall and Shane A. Pennington —

President Trump recently signed Executive Order “Increasing Medical Marijuana and Cannabidiol Research,” published on December 18, 2025. This important measure directed federal agencies to reclassify cannabis from Schedule 1 to Schedule 3 under federal law, marking a major step forward for medical research, patient access, and the broader cannabis industry.

In recognition of this milestone, we would also like to acknowledge entrepreneur and philanthropist, Howard Kessler, for his visionary leadership and commitment to expanding medical cannabis access for seniors through The Commonwealth Project, which aligns with this significant occasion.

“We congratulate Howard Kessler on his vision, perseverance, and critical involvement in advancing medical cannabis access for senior healthcare through The Commonwealth Project, which resulted in President Trump’s historic Executive Order rescheduling cannabis from Schedule 1 to Schedule 3. Howard Kessler championed a cause and became its champion,” said Frank A. Segall, partner and co-chair of the Cannabis practice.

Following this Executive Order, Blank Rome’s Cannabis team has been actively engaging with the media, providing insights and analysis on the implications of rescheduling cannabis.

Tags Executive Order, rescheduling, Schedule I, Schedule III

Controlled Substance Act Legislation Meet Blank Rome Regulatory Compliance

Blank Rome Poised to Guide Clients Through Marijuana Rescheduling

Post author By Blank Rome LLP
Post date December 15, 2025

Shane A. Pennington, Frank A. Segall, and Scott H. Moskol —

As the cannabis industry anticipates a significant executive order that could reschedule marijuana from Schedule I to Schedule III, Blank Rome’s Cannabis industry group is ready to guide clients with strategic insight and timely advice. Regulatory authority and Blank Rome partner Shane A. Pennington, with the support of Cannabis industry group co-chairs Frank A. Segall and Scott H. Moskol, have been directly involved in addressing the Department of Justice’s proposal for rescheduling marijuana on behalf of our clients. Encouraging updates continue to emerge daily, and we believe an executive order authorizing this change will be issued soon.

Shane, Frank, Scott, and Blank Rome’s team of cannabis attorneys are at the cutting edge of industry trends, closely following and influencing policy developments in Washington, D.C. The Cannabis industry group is dedicated to keeping our clients updated in real time, helping you act swiftly and take advantage of new possibilities arising from this historic development.

Once a clear path is set by executive order, our team will host a series of meetings and webinars to help clients navigate the evolving regulatory landscape and maximize the benefits of rescheduling. Building on our longstanding leadership at the forefront of the cannabis industry, our deep knowledge of legal and regulatory issues enables us to guide clients through emerging changes, so they can confidently navigate and benefit from the evolving market.

As you prepare for this transformative moment in the industry, trust Blank Rome to be your partner every step of the way. For questions or to learn more about our services, please contact us.

Tags Executive Order, rescheduling, Schedule I, Schedule III

Banking and Restructuring Controlled Substance Act Employment Issues ESOPs (Employee Stock Ownership Plans) Legislation Mergers and Acquisitions Regulatory Compliance

High Stakes and Material Changes in the Bay State: Senate Bill No. 2722 vs. House Bill No. 4160

Post author By Blank Rome LLP
Post date November 18, 2025

Lauren Medeiros Forster —

There were several material changes relating to strategy, compliance, and deal‑making advanced by Massachusetts Senate Bill No. 2722 (“S. 2722”) on November 13, 2025. Below is a short summary of what you need to know about the Senate’s rewrite and meaningful reshaping of several House‑backed ideas (under House Bill No. 4160 (“H. 4160”)) for changing the legal regime of cannabis in the Commonwealth.

1. Employee Stock Ownership Plans

Employee stock ownership plans (“ESOPs”) are here to stay. Both bills tell the Massachusetts Cannabis Control Commission (“CCC”) to set up clear procedures to allow the sale of a business to employees via an ESOP and to exclude a trustee acting solely for an ESOP during or after a sale when counting toward cannabis license caps under the Massachusetts cannabis laws. That part did not change, which is a positive result for the Commonwealth. The proposed changes to the current law enable succession planning, retention, and worker‑ownership options for operators and investors without tripping license caps and also improve exit/liquidity paths for owners. This also means there would be no caps on the number of licenses an ESOP can own.

Tags Massachusetts

Banking and Restructuring Controlled Substance Act Interviews Legislation Meet Blank Rome Mergers and Acquisitions Regulatory Compliance

Closing the Hemp Loophole: What Monday’s Farm Bill Update Means for Delta-8 and Hemp-Derived THC

Post author By Blank Rome LLP
Post date November 11, 2025

Marc A. Polito —

At Blank Rome’s 9th Annual State of the Cannabis Industry Conference, Frank A. Segall, partner and co-chair of the firm’s Cannabis practice, asked a panel—including Joseph Andreae, CEO of CULTA, Jared Maloof, CEO of Standard Wellness, Ed Schmults, CEO of Firelands Scientific, and Jim Scott, CEO of Statehouse Holdings—what is the number one issue confronting the cannabis industry today? All four chief executives unanimously echoed the same sentiment: the number one issue confronting state-regulated cannabis operators today is the unregulated hemp market, which has become a growing thorn in their sides as the hemp market picked up steam over the past few years. Well, with new action by lawmakers yesterday, it appears this issue is on the brink of being resolved!

Over the past six years, the hemp industry has transformed from a niche agricultural sector into a national marketplace for diverse cannabinoid products. That transformation was catalyzed by the 2018 Farm Bill, which legalized hemp by defining it as cannabis with no more than 0.3 percent delta-9 tetrahydrocannabinol (“THC”) on a dry-weight basis. What resulted from this was an unintended market: intoxicating hemp-derived cannabinoids such as delta-8 THC, delta-10 THC, and other analogs produced from cannabidiol (“CBD”) isolates through chemical conversion. The “hemp loophole,” as it came to be known, allowed psychoactive products to proliferate in convenience stores, restaurants, and online and circumvented the strict controls applied to state-licensed cannabis.

Tags delta-10, delta-8, delta-9, Farm Bill, hemp, hemp loophole

Employment Issues

The Cannabis Labor Crossroads: Historic Strikes, Labor Peace Agreements (“LPAs”), and What Comes Next

Post author By Blank Rome LLP
Post date October 16, 2025

Gustav Stickley V —

Two ongoing strikes in the cannabis industry—one in Michigan and one in Pennsylvania—have become the longest work stoppages in the industry’s history, arriving just as more states integrate labor peace or collective bargaining requirements into the licensing process and ongoing compliance. The converging pressures of the market, regulatory requirements, and national labor policy are reshaping the way cannabis operators manage their workforce.

The Two Longest Strikes in Cannabis History

The strikes at Exclusive Brands in Ann Arbor, Michigan, and at Green Thumb Industries’ RISE dispensary in York, Pennsylvania, now stand as the longest in the legal cannabis market. While both actions reflect shared themes—demands for better wages, a voice in the workplace, and concerns about bargaining conduct—they are unfolding in starkly different market contexts and with different strategic aims.

In Michigan, workers at Exclusive Brands walked out after the company declined to recognize a union election and amid an unfair labor practice charge tied to the firing of a union supporter. Organizing efforts there have focused on public visibility and testing the legal contours of federal jurisdiction over cannabis workplaces. In Pennsylvania, all unionized workers at the RISE York dispensary struck following a breakdown in contract talks, pressing for wages aligned with agreements achieved elsewhere. The Pennsylvania action is a textbook leverage strike, not unlike strikes in other industries, designed to interrupt operations and force bargaining movement.

Market conditions accentuate the divide. Michigan’s open-license adult-use market has experienced oversupply and price compression, leaving thin margins that complicate wage gains even when labor organizing succeeds. Pennsylvania, by contrast, remains a limited-license, medical-only market that supports strong unit economics for multistate operators.

Tags Michigan, Pennsylvania, striking, union employees

Banking and Restructuring

The Cannabis Industry’s $6 Billion Debt Wall

Post author By Blank Rome LLP
Post date October 1, 2025

Gustav Stickley V —

A debt avalanche is bearing down on the U.S. cannabis market to the tune of roughly six billion dollars coming due by the end of 2026, with the top five borrowers—each a multi-state operator (“MSO”)—accounting for about $3.4 billion. The sector’s reliance on costly debt, born of limited access to traditional capital, has set the stage for a potentially messy, uneven reckoning.

Why this matters now

Scale and timing: The maturities bunch up into 2026, compressing the refinancing window and elevating risk across the ecosystem.
Cash flow stress: Many capital structures are expensive, and several operators still burn cash, curbing their ability to refinance on favorable terms.
Market significance: Despite headwinds, cannabis generated $32 billion in 2024 revenue, employed 400,000+ people, and contributed $4.4 billion in state taxes—meaning outcomes here have real economic spillovers.

Tags debt

Controlled Substance Act Legislation Meet Blank Rome Regulatory Compliance

Federal Marijuana Rescheduling Effort Challenged in Congress

Post author By Blank Rome LLP
Post date September 24, 2025

Marc A. Polito —

Where Things Stand Now

Last week, Republican lawmakers in Congress took a major step to block President Donald Trump’s potential move to reschedule marijuana. The GOP-controlled House Appropriations Committee approved a spending bill that would prohibit the Department of Justice (the “DOJ”) from using federal funds to reschedule or deschedule marijuana under the Controlled Substances Act. This move comes as the Trump administration signals it is considering reclassifying cannabis from Schedule I to Schedule III, a change that would have significant implications for the industry and for federal-state relations.

The bill, advanced by the House Appropriations Committee, includes explicit language: “None of the funds appropriated or otherwise made available by this Act may be used to reschedule marijuana… or to remove marijuana from the schedules established under section 202 of the Controlled Substances Act.” This provision, if enacted, would effectively freeze the ongoing federal review process and reserve the authority to change marijuana’s status exclusively for Congress, rather than the executive branch.

Tags Congress, descheduling, House Appropriations Committee, rescheduling, Schedule I, Schedule III

Banking and Restructuring Controlled Substance Act Employment Issues Legislation Meet Blank Rome Mergers and Acquisitions Regulatory Compliance

Turning Over a New Leaf: How Cannabis Receiverships Can Cultivate a Stronger Future

Post author By Blank Rome LLP
Post date September 10, 2025

Lauren Medeiros Forster —

It is no secret that the cannabis industry has been on a wild ride lately, especially in mature markets. Many operators are feeling the pressure, and they are not alone. Let us break down the current landscape, why it is tough out there, and how receiverships and distressed sales might actually be a positive move for struggling cannabis companies.

Many developed cannabis markets are facing serious challenges. Inflation and a shaky economy are making it harder for businesses to stay afloat (regardless of industry type), on top of market saturation that has caused cannabis prices to drop, and tight profit margins for businesses in the more established marijuana states. This is compounded with the harsh effects of tax burdens due to 280E—where cannabis companies are unable to deduct otherwise established business expenses from gross income as a result of the federal illegality of cannabis in the United States—and lack of liquidity from inability to access traditional debt financing and institutional equity markets. As a result, many cannabis companies are finding it difficult to pay their debts and keep the lights on. And because cannabis is still federally illegal in the United States, struggling cannabis operators are limited when it comes to utilizing federal bankruptcy mechanisms for relief.

But hope is not lost. Even in tough times, cannabis businesses along with their management, creditors, and investors, have found options to help their companies restructure and move forward. One of those is a state-level receivership.

Tags distressed sale, receivership

ESOPs (Employee Stock Ownership Plans) Mergers and Acquisitions

On-Demand Webinar: Understanding Cannabis Employee Stock Ownership Plans (“ESOPs”)—Key Questions and Practical Insights

Post author By Blank Rome LLP
Post date May 27, 2025

Frank A. Segall, Scott H. Moskol and Jason S. Luter—

In a rapidly evolving cannabis industry, business owners are facing mounting challenges, from limited access to capital and 280E tax burdens to succession planning and founder burnout. Could Employee Stock Ownership Plans (“ESOPs”) be the solution?

In this webinar, Blank Rome partners Frank A. Segall, Scott H. Moskol, and Jason S. Luter, along with Symphony Risk’s president TJ Frost and director Corey Tobin, explore how ESOPs work, why they’re particularly well suited for cannabis companies, and what’s involved in executing one successfully.

Whether you are frustrated with 280E, exploring exit strategies, looking to boost employee retention, or simply curious about alternative ownership models, this session offers practical insights and real-world guidance.

Watch the full webinar to learn how ESOPs can help you build a more resilient, tax-efficient, and employee-driven cannabis business:

WATCH ON DEMAND

If you would like more information, please reach out to Blank Rome’s Cannabis or ESOP team.

ESOPs (Employee Stock Ownership Plans) Mergers and Acquisitions

FAQ: Employee Stock Ownership Plans (“ESOPs”) in the Cannabis Industry

Post author By Blank Rome LLP
Post date May 14, 2025

Scott H. Moskol and Jason S. Luter —

Welcome to our latest blog post where we delve into the intricacies of Employee Stock Ownership Plans (“ESOPs”). Scott H. Moskol, a partner and co-chair of the Cannabis practice at Blank Rome, and Jason S. Luter, a partner, chair of the firm’s ESOP practice, and co-chair of the firm’s Dallas office answer frequently asked questions about the benefits and mechanisms of ESOPs, particularly within the context of the cannabis sector.

How long have ESOPs been around?
The first ESOP was established in 1956 by Louis Kelso for Peninsula Newspapers. The concept was formalized in federal law by the Employee Retirement Income Security Act of 1974 (“ERISA”).

Are ESOPs used for any other businesses or just cannabis?
Yes, according to the National Center for Employee Ownership, as of the beginning of 2025, 6,358 ESOP companies exist, collectively employing approximately 10.8 million employees, representing almost 8 percent of the private sector workforce in the United States. Over 50 percent of private ESOP companies are in one of three industry categories: Manufacturing (21 percent), Professional/Sci/Tech Services (19 percent), and Construction (15 percent).

For what size cannabis company does an ESOP make sense?
While around $20 million in minimum gross revenues and a minimum of 15 to 20 employees across a cannabis company’s operations is probably ideal, in certain instances an ESOP for a cannabis company with minimum gross revenues of $5–$10 million can be feasible.

Tags FAQ, frequently asked questions