Glass House: The age of cannabis interstate commerce is at hand

Following its first international export of CBD flower to Europe, California-based cannabis cultivator Glass House Brands – by repute the United States’ biggest legal grower by some margin– is ready to start supplying the rest of the country.

In Graham Farrar’s view, Glass House already has everything it needs from President Donald Trump and the U.S. Drug Enforcement Administration to launch the era of legitimate interstate commerce.

“Everything they said would happen is actually happening,” Farrar, Glass House’s president, told MJBizDaily recently.

For once, all that’s left is a green light from the states.

Can cannabis operators ship to other states?

In its own words, Glass House, which boasts more than 6 million square feet of production capacity and says it will produce 1 million pounds of cannabis biomass in 2026, is “poised to supply the world.”

Late last month, the firm became the second publicly traded U.S. cannabis company to uplist. Shares began trading on the New York Stock Exchange on June 30.

That became possible after Glass House, following the lead of Florida-based cannabis multistate operator Trulieve Cannabis Corp., transformed into a medical marijuana-only company.

Becoming MMJ-only was relatively easy for Trulieve, which over the past few years has slowly but steadily divested itself of its holdings in adult-use states. In the case of California-headquartered Glass House, that transition required shuffling its retail operations to an affiliated but legally distinct company.

Glass House operates a massive 7-acre grow in Carpinteria in Southern California’s Santa Barbara County that supplies its 10 retail locations in the state. Those retailers are now 90% owned by a Glass House subsidiary.

Transitioning to medical-only also required reclassifying all of its California cultivation operations as medical – a shift that occurred on paper, which state regulators made easy to do.

And Glass House was able to do so without sacrificing any revenue opportunities while operating in an adult-use state.

Under state law, a medical cannabis cultivator can supply any distributor – and cannabis grown as medical can be legally sold at an adult-use dispensary, state Department of California Cannabis Control spokesperson Jordan Traverso confirmed to MJBizDaily.

“At least in California, there is no distinction between medical and adult-use” at the cultivation level, Farrar explained. “As a farmer, you do all the same things: same pesticides, same parts-per-million (for yeast and mold). It’s all just cannabis until it gets to a place where it bifurcates.”

What do cannabis operators need to do to start exporting?

Separately, Glass House also pursued registration with the U.S. Drug Enforcement Administration, both as a medical cannabis company – the option available to state-licensed firms following the April Justice Department final order rescheduling medical marijuana –  and as a bulk exporter and manufacturer of cannabis, Farrar said.

And the ease with which that happened is what’s encouraging Farrar that the age of legitimate interstate commerce is at hand.

According to Farrar, after Glass House registered with the DEA as a licensed medical cannabis operator, it also filed an application with the DEA to become a bulk exporter as well as a handler of controlled substances. And to his surprise, the DEA approved him, which led a short time later to Glass House’s first bulk export of CBD flower.

It went to a third party, and Farrar assumes the final product, the first legitimate shipment of California cannabis flower, albeit under 0.3% THC, went to Europe, where CBD flower is sold at retailers in France and Switzerland, for example.

And if Glass House can do that for France, it can do so for Florida, Maine and everywhere in between, Farrar said.

How can cannabis operators prepare for interstate commerce?

Like nearly every other state in the U.S., California operators use Metrc’s track-and-trace software. On Farrar’s Metrc screen, there’s a field where he inputs a fellow operator’s state license identifying number.

But with the DEA also registering operators and issuing registration numbers, all Farrar needs to start a transaction with a distributor in Michigan or a retailer in New York City would be that operator’s DEA control number, he said.

That, and approval from state lawmakers and Gov. Gavin Newsom. And whether state officials will sign off on a cannabis firm exporting to other states remains to be seen.

Unlike every other commodity, state law still requires cannabis to be grown within state borders – less a function of federal law than it is of state-level track-and-trace requirements that mandate product be contained within its seed-to-sale tracking system.

And while state cannabis law forbids out-of-state product in part to cut down on diversion, state regulators are also unclear whether Trump administration officials share Farrar’s view.

“We don’t have guidance from the DEA whether interstate commerce will be allowed by their registrants,” the DCC’s Traverso said.

“Glass House has met with us and shared statutory changes that would allow state licenses that are registered with the DEA to send product to research institutions, out of state or internationally.”

“These changes would require a change to state law,” Traverso added. “There is no current bill in California that includes these proposed law changes.”

Can interstate and international cannabis commerce save California cultivators?

When and if a lawmaker does carry such a bill, Farrar believes they’ll find it will achieve something rare: universal support among California cultivators.

“This is a case where every single California cultivator and brand is on exactly the same page,” Farrar said.

“And for everybody else, the brand of California cannabis is famous around the world,” he added. “We all want the same thing.”

To DCC, he said, “Tell us how you want us to move product over from Metrc to DEA so we can ship it, be that to Texas, Florida or Germany.”

At least in Texas and Florida, Farrar believes he’ll have more support – from regulators in those states. Those regulators will have the choice of taking on the hassle of licensing, inspecting and regulating cannabis cultivation operations like Farrar’s – or choosing not to license such operations, letting California handle those headaches, and choosing instead to be solely an importer.

That’s the arrangement most states follow with tobacco, which is cultivated in Kentucky and North Carolina – and few other places.

And that in turn would rescue distressed cultivators up and down the Golden State, where declining prices have decimated small operators.

Said Farrar: “Small farmers need (interstate commerce) to survive.”

Chris Roberts can be reached at chris.roberts@mjbizdaily.com.