July 2026 Newsletter
The Vireo-Cannabis transaction described in this month’s newsletter is a live example of a pattern showing up across the industry: cannabis companies mostly can't file Chapter 11 the way other businesses do, so distressed sales instead move through a handful of alternative processes: state receivership, assignment for the benefit of creditors, plain foreclosure, or, like in Cannabist's case, a newly tested cross-border route through Canada. Each structure has different implications, and the buyers who understand the difference have a real advantage.
In our new field guide, we break down:
- why federal law keeps most cannabis companies out of bankruptcy court, and the workarounds that have taken its place
- how Cannabist's assets played out state by state: what sold, what's pending, and what got surrendered outright
- what happens to a license and to leased or owned real estate when an operator goes through a distressed sale
- a due diligence checklist built specifically for buying out of a receivership, an ABC, or a foreclosure
With billions in MSO debt still coming due, this won't be the last distressed portfolio to hit the market. Read the full guide so you know what to expect.
DEA Hearing Concludes: Rescheduling Decision Now Rests with the Agency
The DEA's expedited hearing on adult-use cannabis rescheduling, previewed in last month's Newsletter (link to newsletter post), concluded on July 15. Over the hearing's roughly two and a half weeks, the government presented its case, followed by testimony from several prohibitionist organizations. The administrative law judge's findings are non-binding. Final authority now rests with the DEA Administrator, and most observers expect a decision no earlier than fall 2026.
Nothing has changed yet for adult-use operators. The April order that moved state-licensed medical cannabis to Schedule III, eliminating Section 280E for those operators, remains untouched by the hearing's outcome. What's still at stake is whether that same relief extends to the adult-use market, which makes up the bulk of state-licensed sales nationwide. Cannabis stocks have already priced in some optimism: the MSOS ETF touched 2026 highs even before the hearing closed.
For CannaMLS users, the practical takeaway is patience rather than urgency. A favorable ruling this fall could meaningfully lift adult-use valuations, but nothing here changes the math on a deal you're evaluating today.
Two Federal Bills Aim to Finish What Rescheduling Started
Rescheduling alone doesn't fix cannabis banking, and two bills introduced this month are aimed at addressing that gap.
On July 16, seventeen Senate Democrats led by Chuck Schumer, Cory Booker, and Ron Wyden reintroduced the Cannabis Administration and Opportunity Act, which would fully deschedule marijuana and let states set their own rules without federal interference. It's a Democrats-only bill in a divided Congress, so treat it as a marker of where the policy conversation is heading rather than something likely to pass this session.
More relevant to real estate and deal financing: a bipartisan group, including Senators Jeff Merkley, Lisa Murkowski, Elizabeth Warren, and Steve Daines, along with Representative Dave Joyce in the House, reintroduced the SAFE Banking Act in mid-July. It would extend clear protections to banks, credit unions, insurers, payment processors, and lenders serving state-licensed cannabis businesses. SAFE Banking has now passed the House seven times since 2019 without ever getting a Senate floor vote, so we wouldn't underwrite a deal around its passage. But if it clears the Senate, it could be the piece that actually unlocks conventional financing for cannabis real estate, which today still runs almost entirely through specialty lenders and higher-cost debt.
Vireo Growth to Absorb ~25 Dispensaries in Five-State Cannabist Deal
Consolidation continues! On July 20, Vireo Growth announced an agreement to acquire cultivation, manufacturing, and retail assets from The Cannabist Company, which is restructuring through bankruptcy proceedings. The deal is valued at up to $35 million: roughly $18.75 million in cash at closing plus $16.25 million in seller notes.
The assets span five states, Colorado, Illinois, Massachusetts, New Jersey, and West Virginia, adding roughly 25 dispensaries plus one cultivation and one production facility. Closings are staged through 2026 into 2027, pending regulatory approval in each market. Once complete, Vireo expects to operate around 230 dispensaries across 15 states, putting it in position as the second largest dispensary network in the country.
This is the consolidation trend we flagged back in May playing out with real numbers attached: a distressed operator's real estate and licenses moving to a buyer with the balance sheet to run them. Expect more of this as capital stays selective.
Missouri's Microbusiness Applications Have Closed, Lottery Set for September
Missouri accepted applications for 77 new microbusiness licenses (dispensary and wholesale only) from July 13 through July 27, with a refundable $1,500 application fee. Eligibility leaned toward social equity criteria: low net worth, veteran status, a past marijuana-related conviction, residence in an underserved area, or attendance at an under-resourced school.
On September 9, the state will have a qualified lottery to choose winners. If you applied, that's your date to watch. If you didn't, it's still worth tracking: every microbusiness winner will need a compliant retail or wholesale site quickly, and Missouri's licensing rounds tend to produce a wave of real estate demand and license sales in the months right after a lottery. Important to note: in Missouri, microbusiness licensees can only engage in business with other microbusiness licensees, essentially creating two parallel retail channels that are isolated from each other. Missouri is one of very few states with this type of bifurcated supply chain.
Major Ohio Operator Hits the State's Dispensary Cap
Private MSO Greenlight announced on July 15 that it has reached Ohio's maximum of eight dispensaries per operator, adding four locations (two conversions, two new builds) and new in-state manufacturing capacity. The company now runs 34 branded dispensaries across five states.
Ohio caps how many dispensary licenses a single operator can hold, and Greenlight hitting that ceiling is a useful data point for anyone evaluating an Ohio asset. It signals that a well-capitalized operator sees enough headroom in the market to build out its full allotment and add manufacturing on top of it, rather than looking to expand elsewhere. In a capped market, existing licenses only get scarcer as operators max out, which tends to support valuations for the ones still available.
Connecticut Trades Its Potency Tax for a Flat Rate
Connecticut is scrapping its complicated, milligram-by-milligram THC tax for a flat 10.75% retail excise tax, effective October 1. Under the old system, flower was taxed at 0.625 cents per milligram of THC, edibles at 0.9 cents, and vapes and concentrates at 2.75 cents, which required tying lab results directly into point-of-sale systems just to calculate what was owed. Combined with the state's 6.35% sales tax and 3% municipal tax, shoppers will now see a predictable 20.1% added at checkout. Medical cannabis stays exempt either way.
The state also eliminated its THC potency cap on concentrates alongside the tax change, which should open up product development the old system effectively penalized. For operators, this means operational simplification, less integration overhead, more predictable margins, and it's worth factoring into how you value a Connecticut retail or processing license.