Ep 11: Cannabis Is Growing Up: Why Execution Now Beats Hype — The Shift

with Filip Gacic · The Shift, a podcast by Headquarters

DEA hearings end with a surprising Schedule III concession, as Europe prepares to launch its first cannabis medicine for chronic pain.

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Auto-generated from the episode audio and lightly edited for readability.

0:07 If you've been following the cannabis industry over the past few weeks, you've probably heard me talking about the DEA rescheduling hearings. Last week, we've talked about why the process was taking so long. This week, the hearings are officially over. And honestly, I don't think the biggest story is that they ended. I think it's what happened inside

0:27 the courtroom because after years of debates, months of preparation, and week of testimony, one moment stood out to me more than any other. Not because it was dramatic, you know me, but because it was unexpected. According to business of cannabis, one of the expert witnesses

0:46 testifying on behalf of opponents of rescheduling acknowledged during the hearing that cannabis meets the legal standard for placement in schedule 3 under the Control Substances Act. Now, let's slow down for a second. That doesn't mean the witness suddenly became

1:05 a procannabis person. It doesn't mean everyone involved now agrees. And it certainly doesn't mean cannabis has officially been moved to schedule three. But it does raise an interesting question. If even an expert witness called by opponents acknowledges that

1:24 cannabis appears to meet the legal standard, then what exactly is the remaining debate about? Because remember, this hearing was never really about asking whether people like cannabis. It wasn't about whether individual states should legalize adult use cannabis. And it wasn't about politics. At its core, this hearing

1:44 asked a much nearer question. Does cannabis meet the legal criteria established under federal law to be placed in schedule 3? That's the question. And it's a very different conversation. According to DEA, the administrative hearing began on

2:02 June 29th and concluded on July 15th after receiving testimony from designated participants selected by the agency. The next step is for the administrative law judge to review the record before the DEA ultimately decides how to proceed.

2:21 Notice something? The hearings are over. the discussion isn't now the process moves from testimony to evaluation from arguments to decisions and that's why I think this story matters not because we have a final

2:40 answer we don't but because the conversation itself seems to be changing a few years ago people were asking whether cannabis had any accepted medical use at all today the discuss question has become much more technical.

2:58 How should cannabis be regulated? What standards should apply? What does federal law actually require? That's progress. Not political progress, regulatory progress. And those aren't always the same thing. Now, what should businesses take away

3:16 from all of this? The same thing I said two weeks ago. Don't build your company around tomorrow's headlines. build it around today's execution because even if schedule 3 eventually becomes reality, the companies that benefit the most won't necessarily be the ones who predicted it, they'll be the ones that

3:35 already have strong operations, strong compliance, strong financial discipline, strong relationships with customers. In other words, they'll already be ready. So, what's the shift? The shift is for years the cannabis industry has argued that it deserves legitimacy. This week's

3:55 hearings suggest the conversation may finally be beyond whether cannabis has medical value and toward how that reality should be regulated and for this industry that may be the biggest shift of all. Two weeks ago we talked about Germany quietly becoming

4:13 Europe's cannabis powerhouse. We talked about pharmaceutical standards, patient access, supply chains, and why some of the biggest companies in the industry are investing there. But this week, Germany isn't just talking about medical cannabis anymore. It's putting it into patients hands. And

4:33 I think that's a much bigger story than most people realize. According to Pain News Network, Europe's first cannabis-based medicine, specifically approved for chronic pain, is expected to launch in Germany and Austria next month. This isn't another vape. It's not another edible. It's not another

4:51 celebrity cannabis brand trying to stand out on a dispensary shelf. This is a prescription medicine, right? And that's a completely different conversation. Think about how much the cannabis industry has changed. For years, the biggest argument was, "Does cannabis

5:10 actually have medical value." And that debate dominated headlines. Researchers, politicians, doctors, patients, everyone. Everyone seemed to have an opinion. Today, the question isn't whether cannabis can be medicine. The question is which conditions can it treat? That's

5:29 a huge shift. And I think that's something people often overlook. Medical cannabis doesn't become successful because politicians say it should. It becomes successful because physicians prescribe it. Because patients benefit from it. Because regulators review the evidence because manufacturers meet

5:47 pharmaceutical standards. Those are completely different milestones than legalization. According to Pain News Network, the therapy received approval for clinical development focused on chronic pain, one of the most common conditions affecting millions of patients literally worldwide.

6:07 Now, whether this particular product becomes a commercial success, we don't know yet. But honestly, that's not the point. The point is that cannabonoid medicines are increasingly entering the health care systems through the same regulatory pathways as other pharmaceutical and that's exactly what

6:26 mature industries do. Here's what I find fascinating though. A few years ago, the cannabis conversation was almost entirely political. Who's going to legalize next? Which state is next? What will Congress do? Now look at the headlines. Clinical trial regulatory approvals. manufacturing standards,

6:46 prescription medicines, patient outcomes. That's a different industry. And I think this creates something else. Two completely different business opportunities. One side of cannabis will always be consumer products, brands, retail dispensaries, marketing, customer experience, all that stuff. The other

7:04 side is beginning to look more like biotechnology research, clinical development, intellectual property, long-term healthcare partnerships. those businesses might use the same plan but they're playing completely different games. So here's the question I'd leave you with. Are we still watching the

7:22 cannabis industry or are we watching the birth of an entirely new pharmaceutical category? Because I don't think those are the same thing. And if Europe continues moving in this direction, Germany may not just become Europe's biggest cannabis market. It may become

7:41 the place where a future of cannabonoid medicine is built. For years, the cannabis industry fought to prove it belonged in medicine. Now, medicine is beginning to decide where cannabis belongs. And that may be the biggest change of all. I want to finish today's

8:00 episode with a question because every week we talk about new products, new regulations, new investments, and new markets. But how often do we stop and ask who's actually winning? According to business of cannabis, medical cannabis businesses continue

8:18 expanding internationally as companies invest in patient access, manufacturing, and distribution. But here's what stood out to me. None of those headlines mention hype. None of them mention celebrity brands. None of them mention viral marketing campaigns. They talk about infrastructure, supply

8:38 chains, manufacturing, distribution, compliance. In other words, they talk about the things customers rarely see. And I think that's one of the biggest misconceptions in this industry. People often assume the companies with the loudest marketing are the ones winning. But are they? Think about

8:58 almost every successful industry. Amazon didn't become Amazon because it had the coolest commercials. Costco didn't build its business around hype. Pharmaceutical companies don't become market leaders because they have the best Instagram page, although it sometimes work. They win because they solve operational

9:18 problems better than everyone else. Cannabis is becoming exactly the same. As this industry matures, I think the competitive advantage is shifting. It's becoming less about who can launch the next exciting product and more about who can consistently deliver.

9:38 Can you manufacture at scale? Can you meet regulatory standards? Can you keep products in stock? Can you build trust with physicians, patients, distributors, and retailers? Because those are much harder things to copy than a logo or a marketing campaign. And I think that's

9:57 good for the industry. Mature industries reward consistency, not excitement. So, here's the question I'd leave you with. Five years from now, will the biggest cannabis companies be the ones with loudest brands or the ones with the strongest operations?

10:15 Because if you ask me, that's where the real competition is heading. So, what's the shift? The shift is this. The cannabis industry is entering a stage where execution matters more than attention. And over the long run, businesses don't win because they're the

10:33 loudest. They win because they're the most reliable. One more thing, next week we have a really great guest. And boy oh boy, I'm looking forward to it. So, thank you so much for watching. Have a great rest of the week and we will see

10:51 you next week on the shift.