Cannabis stocks remain out of favor. It has been a long wait, but it is still too soon to give up on key federal reform that could help the sector and boost stocks. That’s the view of a top-five cannabis company CEO.
Meanwhile, states continue to make steady progress on legalization.
None of this should be a surprise. Polls consistently show that a majority of voters favor legalization. Many politicians at both the state and national levels are responding. Beyond polls, we see growing support for cannabis in consumer spending trends. Wallet share continues to rise. I provide more details on these trends below in the news roundup section.
What to Do Now
Consider adding to the safer cannabis names, or at least holding. In this environment, it pays to stay with companies that are most successful at managing their financial strength. From our portfolio, I’ll single out Cronos (CRON), Cresco (CRLBF), Green Thumb (GTBIF), and Trulieve Cannabis (TCNNF). For diversified exposure, consider AdvisorShares Pure U.S. Cannabis (MSOS). Other portfolio names warrant smaller exposure, and Ayr Wellness (AYRWF) is a hold.
Cannabis lenders in our Cannabis Plus Insider Portfolio continue to look attractive for their rich yields and capital appreciation potential in a rescheduling and banking reform scenario. They are: Advanced Flower Capital (AFCG), Chicago Atlantic Real Estate Finance (REFI) and Chicago Atlantic BDC (LIEN). They pay yields in the 13% range.
These yields seem suspiciously high. But all but one of these companies recently affirmed their dividend payouts. I offer more details on the portfolio company news roundup below.
Cannabis News from Around the World
Part of my core thesis for being bullish on cannabis stocks is that there continues to be tremendous cultural momentum toward cannabis reform around the world. I’m convinced institutional investors will not ignore cannabis stocks forever.
We see evidence of this powerful cultural momentum in the changes in laws to legalize cannabis, big tobacco investments in the space, robust cannabis sales growth in states that legalize, and increased cultural acceptance in the form of relaxed drug testing standards in sports leagues and the workplace. Polls also show a growing majority of people support legalization regardless of age and party affiliation.
These trends suggest cannabis stocks are a strong contrarian buy that will turn very profitable for patient investors with a medium-term horizon. The sector is so volatile, it is easy to get shaken out of names by heightened emotional reaction to drawdowns. So, it is important to catalogue evidence of this cultural momentum. That is the purpose of this section of Cabot Cannabis Investor.
Federal News
* Rescheduling is on the ten-yard line. It may happen before the fall of 2026 because President Donald Trump sees it as a way for his party to win seats in the midterm elections, says one sector insider with ties to Washington, D.C.
This would be big news for cannabis investors since rescheduling progress would light a fire under stocks in the space.
“I believe Trump realizes the political reality of cannabis is that this country is moving towards cannabis, not away from it,” Trulieve (TCNNF) CEO Kim Rivers opined at the Benzinga Cannabis Capital Conference in Chicago earlier this month.
Polls confirm that she is right. A recent survey by a conservative pollster who Trump consults, Fabrizio Lee, found that 70% of Americans support cannabis rescheduling.
“Rescheduling” refers to the movement of cannabis to Schedule III from Schedule I under the Controlled Substances Act. The change would pave the way for the legalization of medical use at the federal level. It would also free up cash flow in cannabis companies. That’s because rescheduling would neutralize an IRS rule banning the deduction of expenses against revenue from Schedule I substances.
Here’s the key election angle to keep in mind. Support for rescheduling rises to 80% in the 18- to 35-year-old age group, according to the Lee poll. Rivers thinks this suggests Trump will bear down on rescheduling in time to help conservatives win midterm elections.
“That’s the same demographic that this administration was very focused on during the election campaign. And candidly, I believe it’s a demographic that’s very important to them in the midterms,” she said. “I do not believe the president’s position has changed as it relates to medical cannabis.”
For one thing, it’s personal, said Rivers. During his election campaign, Trump said he favors rescheduling in part because he knows of people who benefited from medical cannabis use. “He has personal experience,” said Rivers. “That’s the biggest change agent that we all have, and that has happened in the president’s sphere of influence. There are friends of his who use cannabis for medical reasons.”
The bottom line: Rivers says the administration is “on the ten-yard line” on rescheduling.
The Trulieve CEO also said the President favors SAFER banking reform, which would make it easier for banks to serve cannabis companies. Among other things, the reform would allow cannabis stores to use credit cards. Rivers thinks we could see progress on SAFER banking around the end of this year or in early 2026. “I believe we have a real shot at SAFER banking this year extending into next year,” she said.
Her bullish take on reform was echoed by cannabis law reform advocate Weldon Angelos, who Trump pardoned during his first term while Angelos was doing time for a possession conviction. At the Benzinga cannabis conference, Angelos said he has since continued to work with Trump on cannabis criminal justice reform.
“One thing that I learned from working with President Trump is that he usually keeps his word. If he says something, he does it,” Weldon said. “We’re constantly meeting and hearing positive things,” Angelos added. “I think it’s going to take some time, but we’re going to get there.”
Cannabis investors currently await the formal appointment of Terrance Cole to become the Drug Enforcement Administration (DEA) administrator. Cole has said he will prioritize rescheduling. But in Senate testimony, he was cagey about the extent to which he supports rescheduling. It may not matter, though, since direction on key policy issues seems to come right from the top, in this administration.
* Most voters favor federal cannabis reform that ends prohibition of recreational use, and around half of voters say they would like Trump more if he took steps to make this happen, according to a recent poll. Nearly half of voters in the poll said they’d be more likely to vote for a candidate who backs federal cannabis reform. The findings come from a poll paid for by the Coalition for Cannabis Policy, Education, and Regulation (CPEAR). It was conducted by Forbes Tate Partners.
State News
* Texas has long been hostile territory for cannabis. But that seems to be changing. Gov. Greg Abbott (R) recently signed into law a bill that significantly expands the state’s medical cannabis program. The law expands the list of medical cannabis qualifying conditions to include chronic pain, traumatic brain injury, Crohn’s disease and end-of-life palliative care. The law expands legal delivery mechanisms to include patches, lotions, inhalers and vaping devices. It also increases the number of medical cannabis licenses to fifteen from three.
* Abbott also recently vetoed a bill that would have banned consumable hemp products that contain THC. Instead, Abbott says hemp should be regulated like alcohol. Texas legalized consumable hemp in 2019, after the 2018 enactment of the federal Farm Bill, which legalized the plant nationwide. Since then, the market for hemp-derived THC products has taken off both in Texas and nationally.
* Minnesota recently issued the state’s first recreational-use cannabis business license. The Office of Cannabis Management (OCM) said it issued the license to Herb Quest, LLC, a cultivation business. The state says over 600 businesses have applied for licenses to grow or sell rec-use cannabis. The state legalized rec-use sales in 2023.
* South Carolina Governor Henry McMaster (R) recently said he thinks cannabis advocates make a “very compelling” case for reform that would legalize medical use. “I think we need to study it very carefully, get as much information as we can, and try to do the right thing,” he said. Polls show that a majority of Democrats, Republicans and independents in the state back the reform.
* A majority of voters in Utah support cannabis legalization, according to a new poll. The poll found that 53% of participants think the state should legalize rec-use cannabis. The poll also found that 55% of respondents support the state’s medical cannabis program. The survey was conducted by Deseret News and the Hinckley Institute of Politics. Republican lawmakers in the House and Senate continue to oppose the reform.
* Consumer spending patterns show cannabis continues to be increasingly popular in the heartland. In May, consumers in Missouri bought $132.81 million worth of cannabis. That was the state’s biggest month for sales this year, and it was a 7.4% increase over May 2024.
* Cannabis also remains increasingly popular back east. Connecticut’s recreational-use cannabis sales hit a record $18.7 million in May, compared to $17.5 million in April. Medical cannabis sales rose slightly to hit $6.5 million. The sales growth happened as prices continued to fall. Cannabis cost $9.98 per gram in May, down slightly from $10.03 in April.
* Some states, however, are posting slower sales growth or outright declines. Michigan cannabis sales rose 0.9% sequentially to $272.6 million in May, but they were down 2.5% compared to the year before.
* An Alabama judge has agreed to hear a case brought by residents who say they have been unable to use medical cannabis because the Alabama Medical Cannabis Commission (AMCC) has failed to properly set up a patient registry for use.
Sector News
* In a sign that business-unfriendly price compression might soon be easing up, the number of cannabis sales licenses grew less than 1% in the first quarter, according to a recent report from the research group CRB Monitor. Approved or pending license applications declined 5% in the first quarter of 2025.
“After a period of aggressive expansion and painful corrections, we’re seeing the market settle into equilibrium,” said CRB Monitor CEO Steven Kemmerling. “Most markets are now focused on profitability, not expansion. The era of easy money is over.”
* A lot of sports fans think it’s OK for cannabis companies to sponsor teams. More than 50% of fans of the following sports approve of cannabis sponsorship: the National Hockey League, NASCAR, Major League Soccer, Ultimate Fighting Championship and Pro Tennis. Half of National Basketball Association fans gave a thumbs up. Less than 50% of Pro Golf and National Football League fans think it would be OK. The data come from a poll by Performance Research and Full Circle Research. Sports leagues have been loosening restrictions on cannabis use by athletes over the past several years.
International News
* Canadian cannabis sales advanced 5.7% in April to $466.7 million. March sales were $443.9 million. Analysts say lower prices are attracting consumers from the illicit market. They also cite an increase in the number of stores. The figures are in Canadian dollars.
Main Portfolio Company News
Curaleaf (CURLF)
Curaleaf recently appointed consumer goods and marketing expert Rahul Pinto as president. Pinto previously worked in brand development and marketing at Albertsons (ACI), PepsiCo (PEP), and Bacardi. Pinto joins the company following recent hires of digital and brand marketing experts with experience at McKinsey, PepsiCo, FreshDirect, Whole Foods and Diageo (DEO).
Tilray Medical (TLRY)
Italy recently gave Tilray the green light to sell medical cannabis in the country through its subsidiary FL Group. Starting this month, Tilray will distribute medical cannabis through pharmacies in the country. With this move, Tilray is ramping up an already extensive presence in Europe, which continues to loosen restrictions on cannabis sales. Tilray also distributes cannabis in Germany, Portugal, Poland and the United Kingdom.
Tilray shareholders also recently approved a reverse stock split that will be in the range of 1-to-10 to 1-to-20. The reverse split will help the company keep its Nasdaq listing, which is at risk because of the low stock price. The company has not yet announced the timing of the reverse split. On average, stocks underperform following reverse stock splits.
Verano (VRNOF)
Verano recently announced a partnership with the Arizona-based cannabis cultivator Grow Sciences. The deal will allow Verano to distribute the company’s flower and extract products through its Zen Leaf stores in Illinois. Grow Sciences markets itself as a provider of premium products with brands like Prickly Pear, Jelly RTZ, Banana Cream Cake x Jealousy, ZKTZ Cubed, Tropical Cherry, Florida Jack and Pineapple Fruz.
Cannabis Plus Insider Portfolio News
Chicago Atlantic Real Estate Finance (REFI)
Our cannabis lender Chicago Atlantic Real Estate Finance recently reaffirmed its quarterly cash dividend of $0.47 per share for the second quarter. It is payable on July 15, 2025, to shareholders of record as of the close on June 30, 2025. The current yield is 13.1%.
Advanced Flower Capital (AFCG)
Our cannabis lender Advanced Flower Capital recently cut its quarterly dividend in half to $0.15 per share for the second quarter. The dividend is payable on July 15, 2025, to the common stockholders of record on June 30, 2025. The previous quarterly dividend was $0.33 per share. This is a setback, but I am going to continue to hold the name. The company blamed the dividend cut on a loss on a loan to an undisclosed cannabis company. Assuming the dividend holds from here, the annualized yield will be 12.7%.
Sunrise Realty Trust (SUNS)
Our Sunrise Realty Trust recently announced a quarterly dividend of $0.30 per share for the second quarter. The dividend is payable on July 15, 2025, to stockholders of record on June 30, 2025. The second-quarter dividend is in line with the first-quarter dividend. The current yield is 10.8%. Sunrise Realty Trust is not a cannabis lender. It was spun out from one of our cannabis lenders, and I kept it in the model portfolio since spinoffs are often initially undervalued.
Chicago Atlantic BDC (LIEN)
Our cannabis lender Chicago Atlantic BDC has not yet announced its second-quarter dividend. But since it is closely aligned with our Chicago Atlantic Real Estate Finance, which just reaffirmed its dividend, I am assuming Chicago Atlantic BDC will likewise maintain its dividend. The company paid a dividend of $0.34 per share for the first quarter.
Chicago Atlantic BDC is the business development company version of Chicago Atlantic Real Estate Finance, which is a real estate investment trust (REIT). Some people, like me, prefer BDCs to REITs since REITs can complicate matters at tax time. Chicago Atlantic BDC’s current yield is 13.6%.
Sector Performance
Our Cabot Cannabis Plus Insider Portfolio is doing well. But our plant-touching Cabot Cannabis Investor portfolio has been weak, along with the sector.
Our Cabot Cannabis Plus Insider Portfolio invests in cannabis-related names that do not touch the plant, where insiders are buying. The stocks are up 26% on average, since they were introduced.
The portfolio is positioned to outperform because investments in AFC Gamma (AFCG), Chicago Atlantic Real Estate Finance (REFI) and Chicago Atlantic BDC (LIEN) pay yields in the 13% range. We will also see capital appreciation in these names if sector catalysts hit.
Because our plant-touching cannabis portfolio is leveraged, it suffers in sector downturns. That is the case now, though it is down less than the sector year to date. Our Cabot Cannabis Investor portfolio cannabis portfolio was down 40% this year as of the June 24 close, compared to a decline of 47% Roundhill Cannabis (WEED) exchange-traded fund.
Our plant-touching portfolio is leveraged because of the large position in AdvisorShares MSOS 2X Daily (MSOX). It is a top-five position. The leverage hurts us when the sector is weak. Likewise, it helps capture more upside as we see progress on rescheduling cannabis, and progress towards approval of recreational use in more large states like Pennsylvania.
When we get a significant sector rally, I will roll back leverage by trimming MSOX in favor of cannabis stocks or the AdvisorShares Pure U.S. Cannabis (MSOS) ETF. If you are a highly active trader, it would make sense to deleverage into rallies in the same manner along the way, and then hope for a pullback to re-lever.
Portfolio
| Stock | Shares | Current Value | Portfolio Weighting | 6/24/25 |
| Ayr Wellness (AYRWF) | 1,692 | $316 | 0.70% | $0.19 |
| Cresco Labs (CRLBF) | 9,180 | $4,269 | 9.70% | $0.47 |
| Curaleaf (CURLF) | 5,698 | $4,456 | 10.10% | $0.78 |
| Cronos (CRON) | 1,683 | $3,181 | 7.20% | $1.89 |
| AdvisorShares Plus US Cannabis (MSOS) | 1,058 | $2,285 | 5.20% | $2.16 |
| AdvisorShares MSOS 2X Daily (MSOX) | 304 | $693 | 1.60% | $2.28 |
| ETFMG Alternative Harvest (MJ) | 125 | $2,115 | 4.80% | $16.92 |
| Green Thumb Ind. (GTBIF) | 3,355 | $16,842 | 38.20% | $5.02 |
| Organigram (OGI) | 4,834 | $6,574 | 14.90% | $1.36 |
| Tilray Brands (TLRY) | 2,071 | $787 | 1.80% | $0.38 |
| Trulieve (TCNNF) | 695 | $2,369 | 5.40% | $3.41 |
| Verano (VRNOF) | 351 | $172 | 0.40% | $0.49 |
| Cash | $0 | 0.00% | ||
| Total | $44,059 |
Canna Plus Insider Portfolio
| Company | Ticker | Date Added | Price Bought | 6.24.25 Price | Total Return* | Current Yield | Current Status |
| Chicago Atlantic Real Estate | REFI | 3.29.23 | $10.08 | $14.23 | 41.17% | 13.30% | Buy |
| AFC Gamma | AFCG | 7.26.23 | $7.45 | $4.76 | -36.11% | 12.60% | Buy |
| Sunrise Realty Trust | SUNS | 7.9.24 | $8.31 | $11.13 | 33.94% | 11% | Hold |
| Chicago Atlantic BDC | LIEN | 2.26.25 | $11.99 | $10.00 | -16.60% | 14% | Buy |
| Cerevel Therapeutics | CERE | 8.9.23 | $21.91 | $45.00 | 105.39% | 0% | Bought out |
| Average: | 26% |
Company Profiles
Ayr Wellness (AYRWF) This is a vertically integrated multistate operator based in Miami. It has over 90 dispensaries. It operates in Florida, Illinois, Massachusetts, Pennsylvania, New Jersey, Nevada, Ohio, and Connecticut. Ayr has 18 grow and production sites, around a dozen national brands, and a proprietary library of over 160 cannabis strains. Like many names in our portfolio, Ayr is strategically positioned in states that look poised to approve recreational-use sales. It has over 60 stores in Florida, for example.
Ayr has built out its brand development strength with the appointment of David Goubert as president and CEO. Goubert previously served as president and chief customer officer at Neiman Marcus Group, and he was at LVMH for 20 years before that.
Ayr is negotiating with lenders ahead of a likely bankruptcy. HOLD
Cresco Labs (CRLBF) Chicago-based Cresco has the #1 market share position in Illinois, Pennsylvania and Massachusetts. The company has the top-selling branded portfolio of cannabis products in the industry. It has the top of branded flower and branded concentrates, and the third-best portfolio of branded vapes.
Cresco offers exposure to many attractive U.S. markets with an emphasis on Illinois. It is also in Pennsylvania, Ohio, New York, Massachusetts, Michigan, Florida, Missouri, and Maryland. Most of those are states that recently expanded into recreational use sales, or are expected to over the next two years.
The company is founder-run, which can be a plus in investing. BUY
Cronos Group (CRON) Cronos is mainly a foreign operator with exposure to Canada, Germany, Australia and Israel.
Cronos has respectable brand strength in Canada. It sells gummies, infused pre-rolls and vapes under the Spinach, Blue-Raspberry Watermelon and Tropical Diesel brands. Spinach products command 15.3% market share in the Canadian edibles category, and 19.8% share in gummies, according to Hifyre.
In Israel, Cronos sells dried flower, pre-rolls and cannabis oils in the medical market. Cronos sells its Peace Naturals brand in Germany, where the cannabis market should grow dramatically over the next several years because of liberalization of restrictions on sales. Cronos has a 10% stake in Cronos Australia, a publicly traded company.
Cronos has $838 million in cash, or about $2.17 per share, against minimal debt. The strong cash position makes Cronos one of the safer cannabis names. Some of that cash could be deployed in acquisitions, possibly to expand in the U.S. adult-use market. BUY
Curaleaf (CURLF) Curaleaf operates over 150 dispensaries and several grow sites in the U.S., and it sells into several cannabis markets in Europe, including Germany and the U.K. It has one of the strongest brand portfolios in the U.S. Curaleaf is positioned to benefit from the opening up of recreational-use sales in New York, Ohio, Florida, and Pennsylvania. Curaleaf should also benefit from progress on liberalization of cannabis laws in Europe. The company is founder-run, which can be a plus in investing. BUY
AdvisorShares Pure U.S. Cannabis ETF (MSOS) This exchange-traded fund (ETF) has large exposure to most of our portfolio names, so it may seem redundant. However, I want to put it on your radar as a liquid trading vehicle for getting in and out of the group without having to make a lot of individual stock sales, and as way to get exposure to many of our names with one purchase. It also gives us diversification beyond our names. BUY
AdvisorShares MSOS 2x Daily ETF (MSOX) This is the leveraged version of the ETF MSOS. It theoretically goes up (and down) by twice as much as MSOS, though the relationship does not always hold. Note that leveraged ETFs suffer from some persistent valuation decay because of the cost of the leverage. BUY
ETFMG Alternative Harvest (MJ) This ETF has foreign exposure, which means it could benefit more than other marijuana exchange-traded funds if we see progress on legalization in Europe. BUY
Green Thumb (GTBIF) Chicago-based Green Thumb is our portfolio’s largest position. It is conservatively managed, which makes it one of the safer stocks in the sector. Green Thumb has been the most profitable multistate operator of all the big ones – a sign of good management.
Green Thumb branded cannabis products include &Shine, Beboe, Dogwalkers, Doctor Solomon’s, Good Green, incredibles and RYTHM. The company operates a national retail cannabis stores called RISE. Green Thumb has over 90 dispensaries across fourteen states. Green Thumb continued to strategically position itself in markets that look poised to expand to recreational uses sales, like Florida and Pennsylvania.
Founder Ben Kovler is chairman and CEO. Research shows that founder-run companies often outperform. Kovler has a large stake in the business. BUY
Organigram (OGI) Organigram is a large Canadian cannabis company. It also sells high-margin flower in Israel, Australia and Germany. Germany should see robust growth over the next few years as it loosens rules on medical cannabis use. The CEO has alluded to “creative ways” to get into the U.S. cannabis market, but does not offer details. British American Tobacco (BTI) is a big investor in Organigram, an endorsement of sorts. The two companies collaborate to develop cannabis products. BUY
Tilray Brands (TLRY) Tilray is a cannabis and consumer packaged goods company with one of the biggest global footprints in the industry. CEO Irwin Simon founded The Hain Celestial Group, a natural food company, which is in the business of brand development. This is a key factor for cannabis companies, too.
Tilray is a big recreational and medicinal cannabis supplier in Canada. It also offers medical cannabis in 20 countries on five continents through its subsidiaries and agreements with pharma distributors. It has operations in Canada, the United States, Europe, Australia and Latin America. It sells craft beer and CBD products in the United States.
Tilray seems like a good play on expected legalization of recreational use in Europe over the next few years, because it has been making significant investments there. It has a medicinal marijuana distribution network in Germany. It has production facilities in Portugal and Germany, the largest medical cannabis market in Europe. Tilray has a craft alcohol business called SW Brewing in the United States. BUY
Trulieve (TCNNF) Trulieve has long been the biggest medicinal marijuana vendor in Florida, where it has a large market share. It has over 190 dispensaries, and two thirds are in Florida. Cannabis activists are trying to get recreational use on the Florida ballot again in November 2026. A win would be huge for Trulieve. Approval could make Florida the largest legal U.S. cannabis market with 22 million residents and 138 million tourists a year.
Meanwhile, Trulieve has been expanding across the country. It is diversifying its presence into Pennsylvania, Maryland, Georgia, Ohio and Massachusetts, among other states. BUY
Verano (VRNOF) Chicago-based Verano has around 140 dispensaries and 14 production facilities in 13 states. The company has a big presence in New Jersey, Illinois, Florida and Connecticut, and states that may soon legalize recreational like Florida and Pennsylvania.
The company’s portfolio of brands includes Encore, Avexia, MÜV and its signature Verano line of product. It operates dispensary concepts called Zen Leaf and MÜV. Verano is founder-run, which can be a plus in investing. BUY
The next Cabot Cannabis Investor Issue will be published on July 30, 2025.
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