The headline today says rescheduling is back on track. The announcement says something different.
DEA isn't finalizing the May 2024 proposed rule — the one that drew 42,000+ public comments and already had a hearing scheduled. They're announcing a new administrative hearing. In deal terms, that's not signing the LOI. That's tearing it up and starting negotiations over.
The Procedural Math
A new hearing means redoing the foundational pieces of the last one. Witness selection. Standing fights. Evidentiary rulings. Cross-examination procedures. The previous attempt burned over a year before it got canceled over DEA bias allegations — and that was with an ALJ already selected and witnesses already lined up.
Starting over realistically adds 6 to 18 months on the low end. And that's before counting the litigation surface this creates for opponents. Smart Approaches to Marijuana has already retained counsel. A new proceeding gives them new procedural hooks, not fewer.
What This Does to Cannabis M&A
Here's where it matters for anyone thinking about buying or selling a cannabis operation.
For two years, sellers have been anchoring their asking prices to a post-rescheduling world. Multiples will expand. 280E goes away. Institutional capital arrives. That story has been structurally propping up the bid-ask gap in cannabis M&A, and it's kept operators sitting on assets they should have moved off of eighteen months ago.
Today hands every one of those sellers a fresh 12 months of the same excuse.
Meanwhile, the comp sheet doesn't care about DEA press releases. Here's where the market actually is:
Every additional quarter of delay means more distressed transactions anchoring the comparable data buyers and lenders actually rely on. The math is simple and unkind: waiting costs money, and today made the waiting longer.
Where the Mispricing Lives
The six-month window that just opened is where cannabis deal mispricing happens.
Sellers will read today's news as confirmation they should wait. Buyers who understand the procedural reality will read it as confirmation they should move. The gap between those two reads is where transactions get done — and where operators who can read an administrative filing correctly will pick up operations, licenses, and real estate at multiples that won't be available once the distressed comps fully cycle in.
The Practitioner's Read
I've spent the last three years in cannabis M&A — closed deals ranging from $250K delivery license management agreements to $4.5M office-plus-retail-license packages in Riverside County. The operators who've done well in that time are the ones who moved when the rest of the market was waiting for a catalyst. The ones still waiting are getting compressed by the same comps they were hoping would reverse.
Today wasn't a catalyst. It was more waiting room.
Smart money isn't celebrating. It's recalibrating. If you're an operator, a licensee, or an investor trying to figure out what today actually means for your position — read the filing, not the headline. Then look at the comp sheet.
That's the whole story.