US Reduces Marijuana Restrictions in Lift to Ailing Industry

0:00Is your multi-entity management creating more confusion than clarity? You need the Intuit ERP. Intuit Enterprise Suite. It's the AI-native ERP solution that's powerful, painless, and proven. Learn more at intuit.com slash ERP. Being a small business owner isn't just a career, it's a calling. Chase for Business knows how much heart and effort go into building something of your own. Manage all your business finances, from banking to payments to credit cards, all in one place with Chase's digital tools. Plus, access online resources designed to help your business thrive. Learn more at chase.com slash business.

0:38Chase for business. Make more of what's yours. The Chase mobile app is available for select mobile devices. Message and data rates may apply. JPMorgan Chase Bank N.A. Member FDIC. Copyright 2026. JPMorgan Chase and Company. When you're running a business, the best days are the ones where priorities stay on track. For midsize and large companies, risk can affect multiple parts of the organization at once, from property and liability to cyber and regulatory challenges. At that level, managing risk becomes an ongoing discipline. At the Hartford, the focus is on helping businesses manage risk before it turns into something more disruptive.

1:16And when losses do happen, that work is paired with insurance coverage shaped by years of underwriting, risk engineering, and claims experience. Learn more at thehartford.com slash risk mitigation. Policies provided by Hartford Fire Insurance Company and its property and casualty affiliates, Hartford, Connecticut. Bloomberg Audio Studios. Podcasts, radio, news. This is Bloomberg Business Week Daily, reporting from the magazine that helps global leaders stay ahead with insight on the people, companies, and trends shaping today's complex economy. Plus, global business, finance, and tech news as it happens.

1:57The Bloomberg Business Week Daily Podcast with Carol Masser and Tim Stenevec on Bloomberg Radio. Keeping a close watch on cannabis stocks. Advisor shares plus U.S. Cannabis ETF, Amplify Alternative Harvest ETF, Tilray, Aurora cannabis, Kronos, Canopy Growth, Cureleaf Holdings. I mean, these are on our radar. Shares of these cannabis companies and ETFs, some getting a bit of a reset, dropping back today after soaring in yesterday's session. And that was on expectations that the Justice Department and DEA would move certain marijuana products to the less strictly controlled Schedule 3, which is reserved for drugs with accepted medical uses and lower abuse potential.

2:40Well, that happened, Tim, earlier today. We're here to talk about the move and what, if anything, it changes for these companies. We've got the CEO, chairman, and co-founder of one of them. Boris Johnson is joining us. He is chairman, CEO, and co-founder of Cureleaf Holdings. He joins us from Europe. Boris, good to have you on the program. So what does it mean that the Justice Department and DEA removes certain marijuana products or moves them to the less strictly controlled Scheduled 3? What does that do for your company? Well, Tim, first I want to correct just I'm not Boris Johnson. Boris Jordan.

3:12Boris Jordan, excuse me. A much more, much more important. I apologize. Thank you for that. Boris Jordan. Good to see you. No, no problem. Listen, this is a monumental move. It's been 55 years since President Nixon on a political decision of scheduled cannabis as a schedule one drug. It's a product that was used for hundreds and hundreds of years as a wellness product by many, both in Europe and the United States. It wasn't too long that Eli Lilly and other pharmaceutical companies were selling cannabis extracts for medical reasons. So this reclassifies it from a Schedule I to a Schedule III drug.

3:47It has several major impacts. The first impact, of course, is that we will be allowed to do research, working with medical institutions and get federal grants to do that research on the product nationwide. Cureleaf, as the largest operator globally and working in Europe, just finished phase one trials and neuropathic medication with cannabis in Europe, in the UK, and moving on to phase two, we can now bring that to the United States. We couldn't do any of that work in the United States. We have a partnership with the University of Pennsylvania Medical Center. And so we will start doing that work here in the United States.

4:22The second aspect of it is that we had a capricious tax on basically a revenue tax on gross margin, which was about 72%. That, you know, It was almost impossibly a profitable company on that basis. Now that will go away as well. So we'll be taxed and treated as any other corporation in the United States, which will immediately make most of the larger players like Curaleaf very profitable going forward. All right. So is the job done? Is this all you guys need to kind of move forward? No, I think that the current rescheduling is being done in two steps. The first step was under something called the United Nations Single Convention on Narcotics.

5:00That was the first step for medical, because under the U.N. treaty, you can only reschedule for medical reasons. The second will be a ALJ hearing was a process started under President Biden, which was halted at the beginning of the Trump presidency. And that will now be restarted on June 29th. That will address the issue of adult use cannabis, rescheduling those products as well. Once that happens, what we expect to happen in the third quarter, then for the most part, I would say this was the first step. Now we need to start working with the federal government on banking, on uplisting to major exchanges in the United States.

5:36And so there will be a lot more work to be done. So that's what I want to talk to you about is the banking side of this and what it changes for banks that are, if anything, does it change anything for banks? Or is the next step that there is something from the federal government that allows banks to do business in this industry? So using the proverbial, you know, broke the glass ceiling, this breaks the glass ceiling. This is the first piece of federal legislation that we've seen since 20 years ago when Rohrbacher-Farr was passed, protecting medical cannabis companies in the states. Now you have the rescheduling of cannabis.

6:09I believe that you're going to see action from the Treasury. We know that both Janet Yellen and I believe Scott Besson have both said they want major banking institutions to bank the cannabis sector. They also want to see these companies on U.S. exchanges. And that will be a part of the process. That may need some legislation from Congress, but also because of the fact that we will be applying for DEA licenses that will make us federally legal as medical companies. Now, that will most likely give us the ability to at least apply for uplisting on the U.S. exchanges. Credit cards, I think, are going to be a big deal, which will increase business dramatically.

6:42So all of these things, I think, are on the horizon going forward. Hey, Boris, but at the end of the day, if the Democrats take the House in November, do you think a future Congress can get along with President Trump to bring recreational changes? I think that we're not going to see a lot of recreational changes. I think the next step is going to be the whole financial services aspect of the business. So we've now rescheduled and now we'll see recreational. I believe they get to legalize this recreationally nationally at a federal level. We need to do the work, right? That's why they're rescheduling from schedule one to schedule three.

7:16We need to do the work with the medical institutions in the countries to work on all of the aspects of the plant to make sure the plant is safe. We know it's safe, but we need to have evidence now because in Europe, it's been proven in Israel and other places that this is a plant that has a lot of wellness aspects to it. We now need to do that in the United States. I think that will take two to three years. So I more than likely suspect the full legalization will probably happen in the next administration. Not that Trump doesn't want to do it, but I believe just the steps that need to be taken are going to take two to three more years.

7:46Who's ever in the White House, who's ever in Congress in the next administration, you think it'll still go through? Yes, I think we're past the point where cannabis was stigmatized the way it was. The Democrats, as we know this, polls at almost 80 percent in the country for legalization. Amongst Republicans, it's 59, 60 percent. Amongst the whole country, it's almost 80 percent. So I pretty much feel that this is going to happen, but it'll probably happen in two to three years on full legalization. But this is a major step forward. Boris, you mentioned the idea of moving from stock exchanges outside of the United States to the United States.

8:20Would you do that at Curaleaf? Yeah, Curaleaf today is the only major cannabis company, global cannabis company, that trades on the TSX in Canada, which is a major exchange in Canada. But still, we don't trade on the NASDAQ. I do believe that this will, over the next couple of years, will more than likely allow us to uplist the U.S. exchanges. Hey, what do you think happens in terms of the industry? So many times you start to see some consolidation of, you know, very smaller companies tying up together. Do you think that ultimately this is going to spur M &A activity? You know, the idea being that if more companies are getting the 280E tax relief, does it make it more attractive, Boris, for the larger players to come in and buy up some of those smaller companies?

9:01Absolutely. I think you're going to see a tremendous amount of consolidations going to the second half of 26 and 27. This decision brings down the cost of capital. It will increase capitalizations, even though we're seeing a correction today. I think it's a misunderstanding of the whole process. People are trying to digest it. But I do think it's going to widen the investor pool that can invest in the sector. I think you're going to see more and more money coming into it, a re-evaluation of these companies. And on the back of that, you are going to see consolidation. This is a scale business. We need to consolidate these companies and create scale.

9:32What does it mean for Curaleaf? So are you already taking calls, thinking about strategizing, like who you might want to tie up with? I mean, Curaleaf's already the largest global player. We are definitely going to be acting on that consolidation. We are in talks with numerous, both regional as well as larger companies. We are talks in Europe. We're talks in the United States. We've been having them for a while because we knew this was coming. It was just a matter of when it was going to come. It has now happened. I think it creates certainty in the market from a balance sheet and cash flow perspective for these companies.

10:00So now I think it'll be a lot easier to make these transactions happen. All right. Stock was up 26 percent yesterday. It's down about 22 percent today. Is it just a case that this is going to still take time? I think, yes, you have to understand that the cannabis sector today does not have virtually no institutional money. This is largely algorithms and retail investors trading in and out of these stocks. As we start to see large institutional investors come back into the sector, those that were there, for instance, when Curaleaf went public in 2018. We had BlackRock, we had Fidelity, we had all of these players in the IPO.

10:31Then they all had to exit because Jeff Sessions removed the coal memo, which made it uncertain to invest in the sector. As those investors, we acquaint on the back of this decision with the sector, and they get permission to invest. I think you're going to see a dramatic re-evaluation in these stocks. I think this is a massive buying opportunity. And if we weren't in the middle of a blackout period, I can tell you, we have a buyback program, we would be doing it. Okay. Well, you got to come back when you're not in the middle of the blackout. Speaking of buying, Boris Jordan, I want to go back to what you said about M &A and the discussions that you're having with companies all over the world and here in the United States, too.

11:05Push deeper for us with that. And what kind of companies? I know you probably can't say the names of the companies, but what specific types of companies is attractive to you right now? I think, you know, given the current regulation, I think we're looking at both retail, which is very unusual right now. We're looking at retail. 65 % of our business is sold online. However, we still have to deliver the product from our delivery point. So think about Amazon and Whole Foods, very similar model where they both come into the store, but mainly come in just to pick up what they bought online. And about 30 % will actually buy in the store.

11:42So we're looking for retail distribution points to continue to distribute these products throughout the country. So we're looking at tuck-in acquisitions in the various states around the country now. And also we're looking at large-scale companies because a lot of these companies, because of historic state regulations, couldn't combine because they had limitations. Most of those limitations are gone now. And we want to build scale and get cost savings from that scale. And we can do that today because the transactions couldn't happen until this day because there was too much uncertainty around the balance sheets because of the tax accruals.

12:13Now that that uncertainty has gone away, now that these companies will be largely significantly cash flow positive and profitable, it makes it much easier to do the transactions. All right. Good stuff. As always, really great to check in with you once again. Boris Jordan, not Boris Johnson. Boris Jordan. Thanks for reminding me. Thanks for that. You can laugh. Although he was the prime minister of England. And mayor of London, yes. It's a good comparison. And mayor of London and the head of the Spectator. Yes, people forget about his journalist past. But Boris Jordan, we'll never forget about you.

12:47That voice you're hearing is Boris Jordan. He's chairman, CEO and co-founder of the$2.4 billion market cap company, Cureleaf Holdings. Stay with us. More from Bloomberg Businessweek Daily coming up after this. If your finance team spends more time finding data than using it, if there's one entity here and one here and one here and one here, if scaling your business feels like starting over, you need the Intuit ERP. Intuit Enterprise Suite is the AI-native ERP solution that's powerful, painless, and proven. Learn more at intuit.com slash ERP. Support for the show comes from Public. Public is an investing platform that offers access to stocks, options, bonds, and crypto.

13:32And they've also integrated AI with tools that can assist investors in building customized portfolios. One of these tools is called Generated Assets. It allows you to turn your ideas into investable indexes. So let's say you're interested in something specific like biotech companies with high R &D spend, small cap stocks with improving operating margins, or the S &P 500 minus high debt companies. Chances are there isn't an ETF that fits your exact criteria. But on public, you just type in a prompt and their AI screens thousands of stocks and build a one-of-a-kind index. You can even backtest it against the S &P 500.

14:08Then you can invest in a few clicks. Go to public.com slash market and earn an uncapped 1 % bonus when you transfer your portfolio. That's public.com slash market.

14:25SEC Registered Advisor. Crypto services by zero hash. Sample prompts are for illustrative purposes only, not investment advice. All investing involves risk of loss. See complete disclosures at public.com slash disclosures. Small businesses are the pulse of every community. They bring people together, create opportunities, and drive growth. With a widespread presence in communities across the country, Chase for Business supports small business owners at a local level. That makes it possible for you to connect, learn from each other, and grow together. There's a real commitment to seeing small businesses succeed.

14:58The Chase for Business team has knowledge and expertise that span a wide range of financial areas. They can help you make more informed decisions as you navigate the complexities of running your business. They'll help your business grow with individual guidance and convenient digital tools all in one place. With that guidance and your determination, you can take your business farther and help build a brighter future for your community. Learn more at chase.com slash business. Chase for Business. Make more of what's yours. The Chase mobile app is available for select mobile devices. Message and data rates may apply.

15:31JPMorgan Chase Bank N.A. Member FDIC. Copyright 2026. JPMorgan Chase and Company. You're listening to the Bloomberg Business Week Daily Podcast. Catch us live weekday afternoons from 2 to 5 p.m. Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app. Or watch us live on YouTube. Our next guest. Usually out there in our San Francisco bureau bank. He's back here in the Bloomberg Interactive Brokers Studio. We're talking about Ed Ludlow. Shares at Intel right now up by more than 14%. Shares just surging. The company giving this strong sales forecast for the current period.

16:07The signal is that the company's beginning to benefit from the build-out of AI infrastructure. Big time. Ed Ludlow is with us from Bloomberg Tech. Ed, you've looked at this company for a long period of time, especially during this turnaround over the last few months. How's it doing? Well, so Ian and I just had a good, pretty long phone call with Lit Boutan and Dave's into the CFO. And we have a lot of answers, actually. You know, when there were so many headlines that hit, it's hard to see what the real driver was. I don't, obviously, the revenue guide, really important, you know, for the current period.

16:38The story is really simple. CPU demand, the Xeon server processor, is really, really big. And so they are now in what they would describe as the enviable position where they can divert supply to feed that market. Kunjan was just talking about the PC market or the client market. We can talk a little bit about that. There are some unique factors there. But basically, demand is strong. It is growing. And they are not yet able to meet it. And that is a good position for Intel to be in. One thing I would say, by the way. But you want to be able to meet it, right? You want to be able. And so this was the story quarter to quarter.

17:14What is the Lit Boutan effect? What does him becoming CEO and changing how the company works actually mean? It means not leaving any money on the table. You know, finding the CPUs that are coming from, finding the CPUs to meet the demand that's out there, and they're doing their absolute best, for sure. Now, margins were really good in the quarter gone, first quarter. Not against history. You know, Intel's a company that used to have margins at 60%. Now we're at 37.5 % or maybe slightly beyond that on an adjusted basis. but i think what was so interesting is this is financial jargon but they were they were honest that that's just because revenues were higher you know they're not necessarily finding the secret source yet on profit so because the demand is strong the supply isn't there they can charge more yeah and so kunjan poses a question why i'd like to hear more about the pc market this is what intel sees in the pc market in the first part of this year the pc makers the client group were able to build up supply of memory chips.

18:14Remember, the backstory is that memory is being claimed by the data centers. You know, it's very similar, the type of memory chip that goes into a PC that goes into a server. The problem is, as Intel sees it, that in the second half of this year, they're going to run out of that inventory of memory and they're going to have to be buying in the market spot prices. And that, as far as Intel sees it, means half and half the second half of this year, the PC market will decline. That's the explanation. It's the behavior of the client group itself, the PC makers, and what they have or have not been able to do in building up inventories and supply of memory chips.

18:48Interesting. And I want to go back to this question that Carol asked Kunjan about the US investment. Yeah, it is. It's just it's it is an interesting time for economic statecraft in the US. I mean, we are the third largest shareholder right before NVIDIA. Yeah. Did the investment is I mean, is it even a possible question to answer? did the U.S. investment fundamentally change this company? It was a big support for the CEO. Kunjan talks about morale. I mean, remember that it was not the only, if you look at it from this perspective, it was not the only balance sheet strengthening exercise that Lit Bu's done.

19:21He's looked at - Right, NVIDIA. He's looked at the private markets or looked at working with private equity on projects. The goal was to strengthen the balance sheet to allow them to be nimble, do the things that they wanted to do. As for U.S. manufacturing, that's a different story, right? They don't name their Foundry customers. There's a lot of question marks over Foundry. But what was so interesting is I asked Litbutan about Elon Musk. And I was like, last night on his own earnings call, Elon Musk name checked you and said, we will use Intel's 14A process, which on paper would be the first time anyone said that they'll use Intel's 14A process.

19:56And he declined to say anything about that. He was like, it's up to the customers to decide if they want to talk about that. We don't comment, put that to one side. But what he said was, and what Dave Zinsa said is, they think they'll get more out of working with Elon Musk than Elon Musk and his TerraFab project will get out of Intel. In other words, Elon's really good at stuff, process, eliminating barriers and, you know, inefficiency. And that was their answer. We think we're going to really benefit from being in this partnership with Elon Musk. He's really good at that. And I thought that was interesting.

20:27That's fascinating. Like you wonder about that relationship, right? Where it goes, certainly from here. 20 seconds, top of mind. when you listen for the call with analysts. That when he declined to comment to me about the implications of a project with TerraFab, he might answer it in more detail on the call, the dollar signs part of it at least. All right. Ed Lovell is going to stick around. Of course, he's the co-host of Bloomberg Tech on Bloomberg Television. This is the Bloomberg Business Week Daily Podcast. Listen live each weekday starting at 2 p.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app.

21:01You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa. Play Bloomberg 1130. We want to bring in the head of macro at the active investment manager operating across Europe, Asia, and North America, Lombard ODA Investment. Florian Elpo back with us, joining us today from Geneva, where it's late into the evening after 8 o 'clock. So we appreciate you taking the time. Florian, the headline that we got that moved markets here in the U.S. and moved oil, too, was about Tehran activating its defense systems and explosions being heard. This is coming from Tehran, we should note, and from Newswire in Tehran.

21:39But I'm curious from you about the macroeconomic backdrop of a war that doesn't seem to where the ceasefire is holding, at least right now. True. Hi, Tim. I'm Carol. Thanks for having me again. And I think it's important to start from the big disagreements, which we can see from markets at the moment. The oil market is saying risk when the equity market is saying risk on and go with the flow. So there's this disagreement going on. The crisis we're confronted in the Strait of Hormuz has this particularity that the longer it lasts, the higher the leverage, basically, uranium have on the U.S., and that leverage is called inflation, meaning it's not war itself, it's just a negative impact of this overall situation.

22:30So, our own estimates are very simple. What you're saying is that if you stay where we are at the moment for a period of three months, you're supposed to be eating about, let's say, 5 % to 15 % of your earnings growth, which is not huge, but still significant enough to let investors rethink their exposure to the market at this point in time in the here and now. Say that again. You said eating 5 % of what? I'm sorry, just if you could reiterate that. No worries. 5 % to 10 % of earnings growth, which is pretty much what's animating market at the moment, right? It was all about the earnings season until now.

23:12And this earnings season was coming with the good news of expanding earnings and strong earnings growth. And that was the best moment for the stock market to rally on the back of that. Now, well, basically, we're still confronted with the temptation of taking profits because this inflation shock creates potentially a negative earnings shock. You know, Florian, something we talked about yesterday. I'm so glad you're going there. Right. This new normal that our team wrote about Bloomberg Economics, but basically no peace, no war. the new normal in the relationship between the United States and Iran, is that what we're moving towards in your view?