The First Domino. And the First Exit. 🚪

Welcome to Advance Genie, the newsletter that helps operators in high-friction industries find smarter paths to capital.

Curaleaf just became the first major MSO to exit hemp.

The company announced on January 20 it will discontinue its hemp division, explicitly citing "new federal regulations prohibiting hemp-derived THC products containing THC above 0.3%"

The $28.4 billion hemp industry now has ten months before enforcement begins. 

Operators are responding differently. Some are exiting. Some are fighting in Congress. Some are expanding through regulatory arbitrage. Some are securing financing before deadlines hit.

January showed all four strategies playing out simultaneously.

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What Curaleaf Just Signaled

Curaleaf's hemp exit generated only $2 million in revenue across Q3 and Q4 2025. The financial impact is negligible.

The signal is not.

This is the first publicly traded MSO to abandon hemp operations and directly blame federal legislation for the decision. CEO Boris Jordan stated the company made "the strategic decision to wind down our hemp business due to new federal regulations."

The timing matters. 

Curaleaf simultaneously announced it is "completing the refinancing of our senior secured notes due December 2026." The company is cleaning house before the debt wall hits.

Q4 revenue excluding discontinued businesses is expected to reach at least $330 million, representing approximately 4% sequential growth. Adjusted gross margin held at 48.5%.

For hemp operators watching from the sidelines, Curaleaf's exit sends a clear message: major cannabis companies are treating the federal ban as definitive.

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The Fight to Delay

Not everyone is accepting the ban as inevitable.

Senators Amy Klobuchar (D-MN), Rand Paul (R-KY), and Jeff Merkley (D-OR) filed the Hemp Planting Predictability Act on January 15, pushing the enforcement deadline from November 2026 to November 2028.

The House version already has 24 bipartisan cosponsors, including House Oversight and Government Reform Committee Chairman James Comer.

Here's what the new law actually does. 

It limits hemp products to 0.4 milligrams of total THC per container. A typical hemp gummy contains 5-25 milligrams. The U.S. Hemp Roundtable estimates 95% of current hemp products will become illegal.

The stakes are significant:

• $28.4 billion annual market

• 328,000 American jobs

• $13.2 billion in wages

Farmers face immediate pressure. Hemp industry general counsel Jonathan Miller emphasized that farmers have "only weeks to decide whether to plant" and without Congressional action, "uncertainty could trigger widespread supply-chain disruptions."

Chairman Comer appeared at a Washington D.C. press conference alongside farmers concerned about the looming ban. 

One Kentucky farmer reported sitting on "a couple million dollars worth of inventory" with buyers refusing new shipments until existing stock clears.

The political picture is complicated.

GOP operative Roger Stone said Trump was "forced" by Republican lawmakers to sign the spending bill containing the hemp ban. But a White House spokesperson said prior to signing that Trump "specifically supported the prohibition language."

That contradiction creates uncertainty operators cannot ignore.

If you're a hemp operator, plan for both scenarios.

Scenario one: Congress passes the two-year delay, giving you runway to reformulate products, build banking relationships, and advocate for a regulatory framework.

Scenario two: The ban takes effect November 2026. Products exceeding 0.4mg become federally illegal. Banking relationships become complicated. Payment processing becomes difficult.

The planting decision cannot wait for Congressional clarity.

Specialized Lenders Still Active

While Curaleaf cleans house, other MSOs are expanding their credit access.

Verano Holdings announced an amendment to its revolving credit facility with Chicago Atlantic, increasing commitment from $75 million to $100 million and extending maturity from September 2028 to February 2029.

The terms demonstrate what well-positioned operators can still access:

• Floating annual interest rate of SOFR plus 6% (subject to 4% SOFR floor)

• No additional collateral pledged for the $25 million increase

• $50 million currently drawn, leaving $50 million available

• No required amortization payments

• Repayment flexibility in $2.5 million increments

CEO George Archos framed the deal as "a strategic step forward while we continue advancing debt refinancing discussions."

Verano's $350 million term loan matures October 2026, and the company is aiming to build flexibility before the deadline arrives.

Chicago Atlantic noted they are "pleased to support Verano's growth and the optimization of its balance sheet with innovative solutions."

The contrast with Curaleaf is obvious.

Curaleaf is divesting non-core assets and exiting marginal markets before refinancing $456.8 million in senior secured notes due December 2026. Verano is expanding credit availability while advancing refinancing discussions.

Both strategies share a common thread: preparation before deadlines hit.

For operators seeking financing, Chicago Atlantic's criteria remain consistent - they favor limited-license state presence, vertical integration, and conservative leverage. 

Operators who can demonstrate stable EBITDA and clean financials are finding capital. 

Those who cannot are becoming acquisition targets.

Prediction Markets: Regulatory Arbitrage at Scale

While cannabis and hemp operators navigate federal uncertainty, prediction markets are exploiting a different kind of regulatory gap.

FanDuel Predicts achieved nationwide coverage in all 50 states less than one month after its December 22 launch.

The expansion strategy is deliberate. FanDuel offers sports event contracts in 18 states where it is not licensed for traditional sports betting. The list includes the largest populations in the country without regulated sportsbooks:

• California (39 million residents)

• Texas (30 million residents)

• Florida (Hard Rock Bet is the only licensed operator)

• Georgia, Alabama, Minnesota, and 12 others

Financial contracts on the S&P 500, Nasdaq-100, oil, gold, and cryptocurrencies are available in all 50 states.

The platform operates as a CFTC-registered Introducing Broker and NFA member, powered by a partnership with CME Group. Under federal commodity law, these are financial instruments. Under state gaming law, regulators increasingly view them as sports betting by another name.

The license risk is real.

Gaming commissions in Ohio, Michigan, Illinois, and New York have warned sports betting companies that offering sports event contracts, even in other states, could jeopardize their sportsbook licenses.

Arizona already acted. The Arizona Department of Gaming notified Underdog of its intention to revoke the company's daily fantasy sports license due to its partnership with Crypto.com, which offered sports event contracts in the state until early December.

DraftKings and Fanatics have also entered the prediction market space. The largest operators are betting that CFTC regulation provides cover that state gaming commissions cannot pierce.

Nevada disagrees.

The Nevada Gaming Control Board filed a civil action on January 16 seeking to stop Polymarket from operating in the state.

This is the first direct state regulatory action specifically targeting Polymarket.

The complaint asks for a declaration and injunction to stop the prediction market from offering unlicensed wagering in violation of Nevada law.

The Gaming Control Board considers sports event contracts, or certain other events contracts, to constitute wagering activity under state law.

Nevada's filing signals that state regulators view prediction markets as an existential threat to the licensing model that has defined legal gambling expansion.

The volume explains why.

According to Artemis data reported by MEXC, Kalshi achieved $474.2 million in daily trading volume on January 17. The platform holds 66.4% of global prediction market share. 

Weekly volume exceeded $2.3 billion in mid-January.

Sports markets drive the overwhelming majority of activity.

When prediction market platforms process nearly half a billion dollars in daily volume, state gaming regulators notice. They also notice that revenue is flowing through CFTC-regulated channels rather than state-taxed sportsbooks.

For prediction market operators: the CFTC vs. state jurisdiction battle is accelerating. Operators must weigh expansion opportunity against license risk in their existing regulated markets.

The Pattern

This month showed operators across frontier industries making consequential decisions about regulatory pressure.

The question is not whether regulatory pressure is coming. It is.

The question is whether you've built the infrastructure and relationships to navigate it before deadlines hit.

For hemp operators: November 2026 is ten months away. The planting decision is weeks away. Plan for both scenarios.

For cannabis operators: The debt wall arrives throughout 2026. Specialized lenders like Chicago Atlantic are still extending credit, but they're selective. Clean financials and limited-license state presence matter.

For prediction market operators: The CFTC vs. state jurisdiction battle is escalating. License risk in regulated states is real. Weigh expansion opportunity against existing market access.

For operators in all frontier industries: The financing infrastructure exists. Stablecoins, specialized lenders, institutional debt facilities, platform capital.

The first domino fell already.

The operators who positioned early won't be scrambling when the next ones fall.