California’s Department of Cannabis Control opened a regular rulemaking October 30 to preserve a process that lets eligible cannabis retailers separate a combined medicinal and adult-use license. The proposal, DCC-2026-04-R, is a step toward permanent regulations, not an announcement that every operator has changed its license or received federal approval.

The department says 95 licensed businesses have already obtained separate medicinal and adult-use licenses under emergency rules adopted June 4. That figure describes California licensing changes. It does not establish that those businesses have registered successfully with the Drug Enforcement Administration, a separate process that remains central to the department’s rationale.

What California is trying to preserve

In its initial statement of reasons, DCC describes operators trying to maintain adult-use business while exploring a distinct medicinal operation. The agency says federal registration guidance has been limited, leaving some licensees waiting for more clarity before changing their structure.

The proposed pathway would allow a business with a combined designation to retain an adult-use license and receive a new medicinal license through an expedited state process. A related legal entity could hold the separate license if the applicable conditions are met. Participation is voluntary, and the agency says it cannot quantify how many additional eligible operators will choose it.

That distinction matters for readers following cannabis reform. A new configuration can give a business another option without changing every rule governing the products it sells. The state is addressing the shape of its licensing system; it is not issuing a blanket statement that all commercial cannabis activity has become federally lawful.

Separate licenses still carry shared responsibilities

The proposed text requires related entities at the same premises to share the same individual owners and designated responsible party. Cannabis goods would have to be physically separated by license, with inventory and tracking records identifying which license holds them. Business records would also be maintained separately.

The entities would be jointly and severally liable for obligations, debts and violations under either license. The proposal treats the related licenses as one licensee for compliance and enforcement purposes. In practical terms, organizational separation would come with documentation duties rather than an opportunity to place problems outside the regulator’s reach.

Retailers would also have to comply with local requirements. The text preserves the restriction that goods designated for medical use only may be sold only to medicinal customers. A second license would not turn that label into an ordinary adult-use product or eliminate the need to identify the appropriate customer.

How a modification request would work

The draft rule lists the information required for a modification: the existing combined license, the name for the medicinal license, the submitting designated responsible party, business-formation records, a federal employer identification number and a valid seller’s permit number. The department would review a request within five business days and identify deficiencies in writing if the requirements were not satisfied.

Existing inventory would stay in the adult-use license’s track-and-trace account at the point of separation. That provision gives the change a defined starting position: a retailer cannot simply relabel its entire stock as belonging to the new medicinal operation without following the applicable inventory requirements.

The displayed proposal includes both a provision about paying an applicable annual medicinal-license fee before inventory transfers and a provision saying no fee is due until renewal for a newly issued medicinal license. Operators should ask DCC to explain how those provisions apply together, rather than build a budget around an assumed fee exemption. This is a useful subject for public comment.

Potential benefits are not guaranteed outcomes

The rulemaking notice estimates about 1,600 licensees could be affected and classifies approximately 97 percent as small businesses. Those are agency estimates of the potentially eligible population, not a prediction that every business will apply or that another 1,600 stores will open.

DCC frames greater flexibility for pursuing federal medicinal registration as a potential benefit. Its discussion also acknowledges uncertainty around future participation and the federal process. Operators should distinguish an agency’s policy objective from a completed registration, a confirmed tax treatment or a demonstrated improvement in profitability.

Comments come before final adoption

Written comments must be received by December 14, 2026. The department plans a virtual public hearing December 15 beginning at 10 a.m.; its notice explains how to request access and where the meeting link will be posted. Read the official notice before preparing a submission so the comment addresses this rulemaking.

For now, California is proposing continuity for a licensing option already used under emergency regulations. The substantive questions are whether the process is clear, how separate records work in practice and what guidance operators still need. The number of state license splits is one measure of uptake; federal registration and business outcomes remain different questions.

Illustrative stock office records; not DCC files or records from a cannabis licensee. Photo: Pixabay / Pexels.

A new Michigan bill would suspend the state’s 24% wholesale cannabis tax for one year, reopening a debate with consequences for licensed businesses and the prices shoppers encounter. House Bill 6440 was introduced October 28 by Republican Rep. Jay DeBoyer and referred to the House Appropriations Committee. It has not become law, and the existing tax remains in effect.

The proposal targets the wholesale levy rather than Michigan’s separate retail taxes. That distinction matters: a pause upstream in the supply chain would not automatically erase the tax lines on a customer’s dispensary receipt or require a retailer to cut its prices by a matching percentage.

What the bill actually says

The introduced text adds a temporary exception to section 5 of the Comprehensive Road Funding Tax Act. It would stop the wholesale tax from being levied during a period beginning on the amendment’s effective date and ending one year later. It does not set an immediate October 28 start to a tax holiday.

The legislative record establishes introduction and committee referral, not passage. A bill number gives the proposal a concrete document to evaluate, but businesses should distinguish that milestone from an enacted change with an operative date. For now, there is no approved one-year suspension to build into a purchase or tax payment.

Tom Angell’s October 29 reporting for Marijuana Moment follows the filing after DeBoyer outlined his plan the previous week. It places the proposal within the wider political debate over Michigan’s cannabis tax. The actual bill offers a narrower and more useful starting point than campaign shorthand about eliminating taxes.

Where the wholesale tax sits

According to the Michigan Department of Treasury’s explanation, the levy began January 1, 2026. It applies to specified adult-use cannabis sales and transfers at the wholesale level, including the first transfer from a licensed establishment to a retail licensee. The state’s 10% retail excise tax and 6% sales tax are separate.

For a typical wholesale transaction, the wholesaler is legally responsible for paying and remitting the tax, even when it collects that cost from a retailer. This is one reason a wholesale-tax debate affects more than the final checkout screen: the obligation arises as product moves into retail inventory, before the eventual consumer purchase.

Treasury’s wholesale-price FAQ distinguishes transactions between unrelated businesses from transfers between affiliated entities. The former use the actual wholesale price as defined by law; the latter use Treasury’s quarterly average wholesale prices. A vertically integrated business therefore cannot assume that moving its own inventory avoids the tax question.

Why a pause would not equal a fixed discount

Treasury’s collection guidance provides a simple example: a $1,000 taxable wholesale sale, assuming no other invoice costs, produces $240 in wholesale tax. A wholesaler may collect that amount from the retailer. That illustrates the levy’s scale at one transaction point; it does not calculate the shelf price of each product in that shipment.

Retail pricing also reflects the underlying product cost and the business decisions made between acquisition and sale. Removing one cost could create room for lower prices, stronger margins or another adjustment. The proposed legislation does not promise which response an individual operator would choose. Shoppers should therefore be wary of translating a 24% wholesale rate into a guaranteed 24% retail discount.

There is also a timing issue for operators carrying unpaid customer invoices. Treasury says the wholesale tax is due for the quarter in which product is sold to the retailer, regardless of when that retailer pays. Changing a tax going forward is therefore different from resolving existing receivables or earlier liabilities. The introduced suspension language contains no blanket instruction to disregard prior transactions. Following the bill alongside Treasury’s published administration guidance gives a clearer picture than assuming a proposed pause would reset every outstanding business obligation.

The competing claims need evidence

In his October 22 statement, DeBoyer argued that a pause would give lawmakers time to reconsider the tax’s effectiveness and ease pressure on lawful businesses. His assertions about revenue performance and the illicit market are arguments for the proposal, not findings established simply by introducing it.

Treasury’s March implementation guidance identifies the department as the administrator and describes quarterly payments, calculations and transition-year provisions. It also explains that revenue supports roads and bridges. Evaluating a pause requires considering both business costs and the public funding affected, rather than treating either side’s desired outcome as automatic.

The next meaningful developments are committee action, any amended text and ultimately a change in law. Until then, HB 6440 is a proposal for temporary relief. The useful takeaway for readers is its precise scope: one wholesale tax, one proposed year, and no suspension currently in force.

Illustrative stock finance photograph; not Michigan tax records or a cannabis business. Photo: Kindel Media / Pexels.

Verano’s latest results show why a cannabis company’s quarter can improve in one important respect while losing momentum in another. The operator reported stronger operating cash generation and a smaller net loss for the three months ended September 30, even as revenue slipped from the previous quarter.

The figures come from Verano’s October 29 earnings announcement. They describe the company’s reported performance, not an independent measure of the entire cannabis market. Reading them against both June and the same period last year gives a more useful picture than the announcement’s headline alone.

The release’s financial tables are presented in thousands of dollars. That detail matters when comparing a table entry with the prose summary: 212,443 in the revenue row represents about $212.4 million. Reading the units first avoids turning a precise disclosure into an exaggerated number.

Annual growth and a sequential decline can coexist

Revenue, net of discounts, reached $212.443 million, compared with $202.810 million in the third quarter of 2025. That is roughly 4.7 percent growth, rounded to 5 percent in the release. It establishes an improvement over the year-earlier period.

But Verano’s August 5 report for the June quarter showed revenue of $217.918 million. Comparing the two published tables puts September-quarter sales about $5.5 million lower, a sequential decline of roughly 2.5 percent. Those calculations use the reported figures rather than the rounded headline totals.

There is no contradiction between the two comparisons. They answer different questions: whether sales exceeded last year’s level, and whether the business grew from the immediately preceding quarter. Keeping the reference period visible prevents either statement from swallowing the other.

The loss narrowed substantially

The latest table shows a net loss attributable to Verano and its subsidiaries of $4.065 million. The corresponding loss was $43.832 million a year earlier and $13.411 million in the June quarter. That is a significant narrowing, while still remaining a loss.

Operating income also increased from June, rising from $3.143 million to $11.908 million. Gross profit was approximately $100 million in both quarters. Taken together, those figures suggest that changes below the gross-profit line deserve attention alongside the sales trend.

A reader should resist translating a smaller loss into a claim that every store or product line became more profitable. Consolidated results combine a business’s activities. Without the appropriate detail, they cannot establish how a particular location performed or why an individual product gained or lost ground.

Cash generation is the sharper change

Verano reported $49 million in cash provided by operating activities for the quarter, compared with $31 million in June. Capital expenditures increased from $12 million to $13 million. Using those rounded disclosures, operating cash less capital spending rises from approximately $19 million to $36 million.

That subtraction is a simple comparison, not a new audited measure or a replacement for the full cash-flow statement. It does show why a sales decline alone would miss an important part of this quarter’s story.

The SEC’s guide to financial statements explains that income and cash flow track different things. The operating section adjusts net earnings for non-cash items and changes in operating assets and liabilities. Investing and financing activities appear separately.

Consequently, positive operating cash flow does not erase a net loss. Nor does a net loss prove that operations consumed cash during the same period. Both can be true because the statements measure different aspects of the business.

Adjusted earnings need their own label

The company reported adjusted EBITDA of $50.353 million, versus $51.231 million in the June quarter. That relatively small sequential decline sits beside the stronger operating cash figure and the narrower net loss. Treating all three as interchangeable would obscure what actually changed.

Verano identifies adjusted EBITDA as a non-GAAP measure and provides a reconciliation. Its usefulness depends on understanding the adjustments, rather than treating the word adjusted as a reason to disregard the net result. The figures can supplement each other without describing the same outcome.

Our recent Jushi results coverage makes a related distinction between sales, adjusted earnings and profitability. It is a useful reading approach across company reports, while each business still needs to be assessed on its own disclosures.

What the next comparison should test

The next report will help show whether the stronger cash generation continues and whether sales regain sequential momentum. Neither conclusion can be settled by assuming the latest quarter will repeat unchanged.

For now, the clearest description is a mixed but more informative one: sales exceeded the year-earlier period, revenue eased from June, and reported cash generation improved while the net loss narrowed. Keeping those separate gives readers a better account of Verano’s position than assigning the entire quarter a single positive or negative label.

Illustrative office photograph; not Verano records or personnel. Photo: Mikhail Nilov / Pexels.