[PRESS RELEASE] – MINNEAPOLIS, June 9, 2025 – Vireo Growth Inc. announced that it has closed its previously announced transaction to acquire Nevada-based Deep Roots Holdings Inc.

Deep Roots was founded in 2023 and is a consistently solid operator in Nevada’s mature cannabis market, with a 54,000-square-foot cultivation and manufacturing facility and ten active retail dispensaries. The company maintains strong relative performance due to favorable contributions from strategically situated stores in Southern Nevada on the Utah border. Also, it holds equity and debt investments in a retail chain in California, and a vertical operator in Ohio and Massachusetts.

Total consideration for the transaction was $132.7 million, paid in the form of 255.2 million subordinate voting shares of Vireo at a reference price per share of $0.52. The purchase price of the Deep Roots transaction represents a multiple of 4.175x 2024 “closing EBITDA” of $30 million. The transaction is subject to claw-back provisions if 2026 EBITDA is below closing EBITDA as of Dec. 31, 2026. The selling shareholders agreed to voluntary share lock-up provisions, with tranches of shares received in connection with the closing unlocking over a 33-month period.

The U.S. Department of Agriculture (USDA) is reminding all retailers that accept federal welfare benefits that they’re prohibited from selling products containing cannabis to people using Supplemental Nutrition Assistance Program (SNAP) funds—and that violating the rule could lead to penalties that include possible “criminal prosecution.”

In a letter to the more than 250,000 retailers participating in SNAP, USDA Food and Nutrition Service (FNS) Administrator James Miller said on Thursday the department is “committed to fighting waste, fraud, and abuse,” which includes “taking swift action to eliminate fraud occurring in the SNAP retailer community and rooting out fraudsters who take advantage of the taxpayer’s generosity.”

“Your participation as a SNAP authorized retailer serves an important purpose. Retailers connect American families to nutritious food each day,” Miller said. “More than 41 million low-income people redeem their SNAP benefits at stores nationwide each month. SNAP is funded by American taxpayers and must be operated with integrity and accountability. All participating retailers must follow the SNAP rules to protect taxpayer dollars.”

To that end, he wrote, the letter “serves as a reminder that it is a program violation to accept SNAP benefits for foods and drinks containing controlled substances such as cannabis/marijuana.”

“USDA FNS is actively fighting fraud and preserving taxpayer dollars,” it says. “Retailers who commit program violations will face consequences which include disqualification from the ability to accept SNAP benefits, monetary penalties, fines and/or criminal prosecution.”

It’s not clear why USDA felt the update on rules around cannabis was necessary, but it also comes amid a series of changes to the department’s FAQ page that similarly reiterates the policy. In the past week, the FAQ’s cannabis language was added and revised at least three times.

As originally updated, it said SNAP benefits can’t go to cannabis-related or CBD food and drink products. Then it was changed to list marijuana and cannabis, without mentioning CBD. Now, in the latest update posted on Wednesday, it says that “food and drinks containing controlled substances such as cannabis/marijuana and CBD” are ineligible.

In any case, the FAQ language doesn’t necessarily represent a policy change, as USDA first issued guidance in 2020 stipulating that while people can use SNAP benefits for certain foods containing “hulled hemp seed, hemp seed protein powder, and hemp seed oil,” they cannot buy “hemp plants, leaves, and shoots.”

USDA further clarified at the time that foods “containing cannabis-derived products, such as CBD, and any other controlled substances, are not eligible to be purchased with SNAP benefits,” similar to what’s articulated in the latest update to the FAQ. The same language was maintained in another update last year.

The letter and FAQ update comes at a time when many in the cannabis space are closely watching for signals about how the administration will navigate marijuana and hemp issues during President Donald Trump’s second term.

In his first term, Trump signed the 2018 Farm Bill that federally legalized hemp, creating an industry that has since experienced significant volatility amid concerns about the resulting proliferation of a largely unregulated market for intoxicating cannabinoid products.

But despite signing that legislation into law—and later endorsing marijuana rescheduling and industry banking access on the 2024 campaign trail—the president hasn’t publicly commented on cannabis policy issues since taking office in January.

Meanwhile, a pair of GOP-led congressional bills filed last month would prevent people from using federal financial assistance under the Temporary Assistance for Needy Families (TANF) program at cannabis dispensaries.

Back at USDA, the agency recently released a noticed that it is terminating a series of trade advisory committees to comply with an executive order Trump signed in February that’s meant to reduce the size of the federal government across multiple agencies. One of those committees that had been expanded to include hemp industry representatives to promote the crop internationally.

Separately, a report released by USDA in April found that, even as more states and some congressional lawmakers pursued bans on consumable hemp products, the industry saw significant growth in 2024.

The National Hemp Report, which USDA conducts annually to assess the economic health of the market, showed that hemp farmers cultivated 45,294 acres of the crop last year, up 64 percent from 2023. And the industry’s value jumped about 40 percent, increasing to $445 million.

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As the fate of the consumable hemp market remains murky amid legislative pushback, a congressional committee held a hearing on the Food and Drug Administration (FDA) last month—with a hemp industry expert explaining how the market is “begging” for federal regulations around cannabis products.

Lawmakers have consistently raised concerns about FDA’s refusal to establish rules allowing for the marketing of federally legal hemp as a food item or dietary supplement.

One potential legislative solution that U.S. Hemp Roundtable’s Jonathan Miller noted to the committee is a bipartisan bill Sen. Ron Wyden (D-OR) filed last year that would create a federal regulatory framework for hemp-derived cannabinoids.

The legislation would empower states to set their own rules for products such as CBD while also empowering FDA to ensure that certain safety standards are met in the marketplace.

In the absence of FDA rules, states from California to Florida to Texas have pushed for sweeping changes to their own laws around consumable hemp products. While much of the focus has been on intoxicating products, federally legal CBD businesses have also found themselves increasingly in the crosshairs.

On Thursday, a GOP-led House committee has approved a spending bill containing provisions that hemp stakeholders say would devastate the industry, prohibiting most consumable cannabinoid products that were federally legalized during the first Trump administration.

Meanwhile, as lawmakers prepare to once again take up large-scale agriculture legislation this session, congressional researchers in January provided an overview of the policy landscape around hemp—emphasizing the divides around various cannabis-related proposals among legislators, stakeholders and advocates.

Senate Democrats released the long-awaited draft of 2024 Farm Bill last year that contained several proposed changes to federal hemp laws—including provisions to amend how the legal limit of THC is measured and reducing regulatory barriers for farmers who grow the crop for grain or fiber. But certain stakeholders had expressed concern that part of the intent of the legislation was to “eliminate a whole range of products” that are now sold in the market.

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Photo courtesy of Brian Shamblen.

“Products that meet intoxicating thresholds should be sold in dispensaries, and products that do not should be available through licensed CBD consumable retailers.”

By Mike Simpson, Lovewell Farms via Rhode Island Current

As co-founder of Rhode Island’s only U.S. Department of Agriculture (USDA) organic hemp farm, and the largest outdoor cannabis farm in the state, I’ve spent the last eight years helping build the hemp industry from the ground up.

At Lovewell Farms, we’ve operated under one of the strictest regulatory frameworks in the country, subject to licensing, batch testing, tetrahydrocannabinol (THC) limits, secure packaging requirements and product traceability. Yet two recently proposed bills, H6056 and H6270, would cut licensed hemp farms like ours out of the very market we helped establish.

These bills, introduced by Democratic Reps. Jacquelyn Baginski of Cranston and Scott Slater of Providence, aim to regulate the sale of hemp-derived beverages containing delta-9 THC, the compound most commonly associated with cannabis intoxication.

Slater’s bill would specifically eliminate the sale of such beverages and drink mix powders in Rhode Island, unless these products are specifically included in the state’s cannabis laws. The bills misrepresent both the science behind these products and the legal infrastructure already in place.

During a recent House hearing, Rep. Baginski stated, “I was surprised to learn that hemp-based THC products are also available in the marketplace and largely sold unregulated…at any establishment with a retail sales permit. That could be a convenience store, a hair salon, a gas station, anywhere.”

Respectfully, this is inaccurate. In Rhode Island, consumable hemp products must be produced by licensed handlers and tested by certified labs. They are subject to strict limits on THC content, comprehensive labeling standards, and age restrictions. If some products are being sold outside these rules, that’s a failure of enforcement, not evidence of an unregulated system.

Rep. Slater’s testimony in support of his bill, which would effectively ban all hemp-derived THC beverages unless sold through a dispensary, also included misleading claims. He asserted that “the hemp-derived THC products are now being sold outside the regulated cannabis system with minimal oversight, including limited testing, weak labeling, no seed-to-sale tracking as well as avoidance of cannabis taxes.”

This characterization erases the work of licensed hemp producers who follow every requirement the state imposes, many of whom, like us, already distribute specific products through dispensaries and operate with full compliance under existing cannabis laws.

Slater went on to say that allowing hemp beverages undermines Rhode Island’s cannabis cultivators, whom he described as his constituents. “I really find it unfair that as soon as this market has started that we’re trying to undermine them…and allowing folks that found kind of a loophole with this synthetically altered hemp in drinks…without going through the same framework that everyone else has.”

But our farm has always followed the framework. There is no loophole for us, just increasing restrictions on products we’ve made legally, safely and transparently for years.

Both bills ignore a crucial scientific fact: Not all hemp products are intoxicating.

Our full-spectrum gummies and vape cartridges, for example, often contain a CBD-to-THC ratio of 25:1 or higher. Peer-reviewed research shows that products with a 15:1 ratio or greater are effectively non-intoxicating, as the CBD counteracts the effects of THC. These products are designed for stress, sleep and inflammation support, not intoxication. Lumping them together with high-potency THC beverages from out of state is scientifically inaccurate and economically harmful.

What’s also troubling is that these bills would hand control of hemp beverage sales to either liquor stores or cannabis dispensaries, while excluding the very farms that have driven the state’s hemp market since 2018.

Rep. Baginski says she wants to “create a new safe marketplace for hemp THC beverages,” but the safest and most transparent path is the one we already have: Products that meet intoxicating thresholds should be sold in dispensaries, and products that do not should be available through licensed CBD consumable retailers. That distinction already exists under current state law.

Rhode Island can and should regulate cannabinoids based on potency, ratios and public health risk. But it must do so with accuracy and fairness. Hemp farmers have invested many years and many dollars into building compliant, small-scale businesses rooted in sustainable agriculture and community health. We are not the problem, we are part of the solution.

My hope is that lawmakers will revisit these proposals and work with, not around, the people who have spent years getting it right. Hemp regulation should be based on science and equity, not stigma or disinformation.

Mike Simpson is the co-founder of Lovewell Farms, Rhode Island’s only U.S. Department of Agriculture (USDA) organic hemp farm. He is also a historian, educator and longtime advocate for policy reform. He was previously deputy director for Regulate Rhode Island and an initiative coordinator for Marijuana Policy Project in Maine. He now lives in Providence and farms in the village of Hope Valley in Hopkinton.

This story was first published by Rhode Island Current.

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Photo courtesy of Brendan Cleak.