While President Donald Trump hangs fire on rescheduling cannabis, we continue to get signs that support what I call the inexorable march towards greater acceptance of cannabis use and legal reform that will help public companies in the space.
We see momentum for cannabis acceptance and reform in: Ongoing federal-level evidence that Trump may actually follow through on his campaign promise to reschedule cannabis; ongoing robust state-level sales growth; opinion polls; and scientific evidence that cannabis has medical benefits.
Below you will find the highlights of these trends.
What to Do Now
Consider adding to cannabis names in our portfolio on significant weakness of 4% or more. Otherwise, consider holding ahead of a possible rally sparked by rescheduling. For diversified exposure, consider AdvisorShares Pure U.S. Cannabis (MSOS). Otherwise, consider any of our portfolio companies.
From our portfolio, I’ll single out Cronos (CRON), Cresco Labs (CRLBF), Green Thumb (GTBIF), and Trulieve Cannabis (TCNNF) for their relative financial strength. For diversified exposure, consider AdvisorShares Pure U.S. Cannabis (MSOS). For leveraged exposure, consider AdvisorShares MSOS 2X Daily (MSOX). That’s a volatile one.
Here is our full plant-touching portfolio: Cresco Labs (CRLBF), Curaleaf (CURLF), Cronos (CRON), AdvisorShares Pure U.S. Cannabis (MSOS), AdvisorShares MSOS 2X Daily (MSOX), ETFMG Alternative Harvest (MJ), Green Thumb (GTBIF), Organigram (OGI), Tilray Brands (TLRY), Trulieve (TCNNF) and Verano (VRNOF). For simplicity, consider getting exposure via MSOS or the leveraged version, MSOX.
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 12% to 15% range.
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.
The key takeaways: We continue to get signs from the political world that President Donald Trump may reschedule cannabis as promised. Cannabis continues to see robust sales growth at the state level. Researchers continue to report medical benefits from cannabis. Cannabis reform continues to make progress in Europe. Opinion polls continue to show a majority of Americans favor cannabis legalization.
Here are the details.
National News
* Cannabis stocks soared in late September after President Donald Trump promoted a video on Truth Social suggesting cannabidiol (CBD) should be covered by Medicare. The short clip features Trump and a narrator endorsing wider CBD access for seniors. “Hemp-derived CBD can make them feel better, live longer and improve their quality of life significantly,” says the video. The video was produced by The Commonwealth Project, a Massachusetts-based medical cannabis advocacy group backed by billionaire Howard Kessler.
The positive stock response was a little puzzling. Strictly speaking, hemp-derived CBD has little in common with THC-based cannabis sold by publicly traded cannabis companies, other than that they come from the same plant. So, the stock market response did not entirely make sense.
But investors took it as a reminder that Trump endorses medical cannabis and is therefore likely to follow through on rescheduling the drug. Trump said on August 11 that he’s considering rescheduling “within the next few weeks,” but so far he has not followed through. Rescheduling, or moving cannabis to Schedule III from Schedule I under the Controlled Substances Act, would be a major catalyst for cannabis stocks since the change would neutralize an IRS rule that prevents cannabis companies from deducting operating expenses.
* President Donald Trump’s political advisor, Roger Stone, recently reiterated that he thinks Republicans could get an edge over Democrats by rescheduling cannabis. He made the comments during “The Stone Zone” broadcast on 77WABC Radio. Stone said the change fits in with Trump’s states’ rights policy view.
“This is particularly unpopular with Big Pharma,” said Stone. “They would much prefer to sell you pharmaceutical drugs that do far greater damage.” He also said alcohol is more harmful than cannabis, yet alcohol sales are legal. “So why not cannabis?” Stone says he began supporting legalization when cannabis helped his father cope with cancer treatment. “I hope President Trump does either reclassify, or even better, declassify cannabis, and does it now.”
* Around 62% of U.S. adults support cannabis legalization and 31% say they used cannabis in the past six months, according to a new survey. Three-fourths of respondents said legalization is a smart way to raise tax revenue, and 73% said cannabis stores strengthen local economies. Around 54% say they would consider investing in a cannabis business. A majority, or 55%, said they would try cannabis if it were legal in their state, and 73% said they think cannabis has health benefits. The data come from the MRI-Simmons 2025 National Cannabis Study.
* A majority of Americans believe cannabis is safe, says a new poll. The Rasmussen Reports study found that 53% of respondents said cannabis use is either “not at all dangerous” or “not very dangerous.” However, 42% said cannabis is either “somewhat dangerous” or “very dangerous,” and slightly more than half said cannabis increases the likelihood of using more dangerous drugs. Not surprisingly, Republicans were more likely to say cannabis is dangerous (54%) compared to Democrats (35%).
* A bill that would de-schedule cannabis by removing it from the Controlled Substances Act has 55 cosponsors from 25 states now that Rep. Dela Ramirez (D-IL) signed on. The Marijuana Opportunity Reinvestment and Expungement (MORE) Act would also nullify federal convictions and impose a federal tax on sales. The MORE Act has twice passed the House but has never cleared the Senate. Prospects appear dim due to scarce Republican support.
* The number of U.S. cannabis business licenses fell 2% to 37,889 sequentially in the second quarter, says CRB Monitor. The number of licenses has been falling since 2022. The pipeline of approved but pending licenses fell 14% to 4,391, the fourth consecutive quarterly decline.
CRB Monitor CEO Steven Kemmerling calls the trend “the great rationalization of the American cannabis industry.” He says the market is ruthlessly shedding excess capacity. At some point, the trend could help marginally support cannabis prices. “This is a painful but necessary phase that will ultimately create a more stable and sustainable foundation for future growth,” said Kemmerling. The number of licenses peaked at around 44,300 in 2022-23.
* The U.S. Cannabis Spot Index increased 7.9% to $1,196 per pound in late September compared to August, says Cannabis Benchmarks. But forward pricing suggests there will be a 6.8% decline in August to $1,115 per pound.
* Global CBD edibles sales will hit $38 billion by 2034 compared to $15.1 billion in 2025, according to a new forecast. The 11% annual sales growth will be driven by consumer demand growth, legalization, and increasing awareness of CBD benefits, says the study from Towards FnB, a research outfit linked to Precedence Research. Analysts expect the fastest growth in the Asia Pacific.
* Social media users on X are largely positive or neutral on cannabis, according to researchers at the University of Rochester Medical Center. They examined more than 2.8 million tweets and found that 22.6% of them were positive on cannabis, while 69% were neutral. About 8% were negative.
The most common themes in positive tweets were medical use of cannabis for pain relief and during chemotherapy. The main negatives were about difficulty quitting, complaints about the smell and worries about side effects. Georgia had the most positive sentiment with 31% favorable posts, while Wyoming had the lowest at 13%. The study was published in AJPM Focus.
* The Food and Drug Administration (FDA) recently decided to start tracking adverse drug events linked to the use of hemp-derived cannabinoid products like CBD.
* The head of the U.S. Department of Transportation (DOT) recently suggested that rescheduling or legalizing cannabis could increase traffic safety risks, particularly among young drivers. DOT Secretary Sean Duffy made the comments on Fox & Friends. He also said cannabis is addictive.
* The Department of Justice has agreed to postpone a civil case challenging the administrative procedure that governs cannabis rescheduling. The stay will be in effect until January 27, 2026, when parties to the lawsuit have to file an updated joint report. The plaintiff in the civil case is Panacea Plant Sciences. The decision doesn’t derail any potential rescheduling decision investors expect from President Donald Trump.
State News
* Wisconsin’s GOP Senate president and two other Republican lawmakers recently introduced legislation to legalize medical cannabis. Senate President Mary Felzkowski (R) filed the bill along with Sen. Patrick Testin (R) and Assembly member Patrick Snyder (R).
“Someone who suffers from a serious health condition should not have to make the choice to travel to another state or break the law so they can try an alternative medicine for relief,” said Felzkowski in a press release. Felzkowski is a cancer survivor.
Felzkowski’s proposal calls for the legalization of medical cannabis to help patients manage the side effects of cancer treatments, seizure disorders, post-traumatic stress disorder and multiple sclerosis.
A Marquette Law School poll released in June found that two in three Wisconsin voters support legalizing cannabis. It found that 67% of voters support the change, including a majority of Republicans (56%).
* A state appeals court in Florida recently ruled that police can’t search vehicles solely on the basis of cannabis aroma. The 2nd District Court of Appeal says it made the change because cannabis possession is now legal. The “mere odor can no longer establish that it is immediately apparent that the substance is contraband,” wrote Judge Nelly Khouzam.
* New York cannabis stores sold $214.4 million worth of product in August, a new record. That’s a sharp increase from sales of $161.6 million in July and $153.2 million in June. The growth reflects the increase in store count and strong demand, a state official said. Sales so far this year were $1.4 billion, which means New York could be a $2.2 billion market this year. New York legalized recreational use in 2021.
* New Mexico’s cannabis sales through the end of September were $428 million, about 10% higher than sales of $394.2 million during the first nine months of 2024.
* Rhode Island cannabis sales through the end of September were up slightly to $89.4 million compared to $88.4 million for the same period last year.
* Michigan legislators recently voted to put a 24% wholesale tax on cannabis products. They expect the tax to raise $420 million in annual revenue to fund road repairs and construction. Opponents said the tax will drive more users to the illicit market.
Medical News
* A large placebo-controlled, Phase III clinical trial published in the journal Nature Medicine recently found that THC helps reduce back pain.
After 12 weeks, participants taking a cannabis extract reported a 1.9-point reduction in pain, compared to 0.6 for those on the placebo. The difference might not sound like much, but it’s on par with current pain medications, says the study. Participants also reported better sleep and quality of life.
The extract, called VER-01 contains 2.5 milligrams of THC. Participants did not report feeling high. The study was done by Matthias Karst, a professor of pain medicine at Hannover Medical School in Germany. The study is significant because it compared cannabis against a placebo.
* Cannabidiol (CBD) can safely treat anxiety, says a new study. Study participants used CBD twice a day for six weeks. They agreed not to consume cannabis during the study. Within a week, participants reported improvements in anxiety, sleep, mood, quality of life, cognition, executive function, and memory. There were minimal side effects. The study was done at McLean Hospital, a psychiatric hospital linked to Harvard Medical School. It was published in Biomedicines. The study used a full-spectrum, high-CBD sublingual product supplied by Charlotte’s Web (CWBHF).
* Over 85% of medical cannabis users say it helps relieve pain at least moderately, and 56% say it significantly reduces, according to a new survey. A third of respondents said cannabis helped them quit prescription drugs. The survey was done by the medical cannabis certification company Green Health Docs.
* Researchers in Italy and Switzerland say they have discovered a new cannabinoid in the cannabis plant, which they call cannabizetol (CBGD). They say it has antioxidant and anti-inflammatory properties. Their work was published in the Journal of Natural Products.
* Cannabis drinks help reduce alcohol consumption, according to a new study. Researchers say nearly four in five adults who consume cannabis drinks say they’ve reduced their alcohol intake. A fifth say they quit alcohol completely. The study was done by a THC drinks company called Crescent Canna.
International News
* The global market for legal cannabis will nearly quadruple to $141.2 billion by 2032 from $38.7 billion in 2025, according to a new estimate from Persistence Market Research. The growth will be driven by legalization, rising consumer acceptance, and growing demand for medical cannabis for chronic pain, anxiety, and neurological disorders, predicts the study. Europe will be the fastest-growing market, says the report. Medical sales will account for 71% of market revenue, and dried flower will be the most popular format at 51% of sales. The report calls out our portfolio names Curaleaf (CURLF), Trulieve (TCNNF), Tilray (TLRY), Verano (VRNOF), and Green Thumb (GTBIF) as major participants in the growth.
* Cannabis legalization in Germany so far has not led to an increase in youth use or traffic accidents, says a new government report. It also found that adult use has not increased. However, legalization has not reduced the size of the illicit market, says the federal Ministry of Health report. An earlier report concluded that youth use declined following legalization. Germany legalized cannabis in April 2024.
* In a sign that cannabis legalization will continue to progress on the continent, the European Union Drugs Agency (EUDA) has created a set of cannabis law reform guidelines called Cannapol. Though details remain sparse, EUDA says the move is the result of changing public opinion and a focus on harm reduction over prohibition, a policy change endorsed by the United Nations. So far, Germany, the Netherlands, Malta, Czechia, Luxembourg and Switzerland have taken steps to legalize cannabis.
Portfolio Company News
While our cannabis companies continue to make incremental progress via moves like store openings and refinancings (see below), the most important sector news in my view is the ongoing insider buying in our cannabis finance companies, which pay yields in the 12% to 15% range.
These purchases tell me the sector is undervalued in general, and that cannabis companies (like the ones these financiers support and also our plant touching companies) are being overly discounted.
Here is a summary.
Advanced Flower Capital (AFCG)
Since the middle of August, insiders here have purchased a very sizeable $4.6 million worth of stock in the 4.10 to 4.81 range. Advanced Flower shares have been shredded in the past few months because a few loans went bad, which forced the company to cut its dividend. These are negative developments, for sure.
However, the insider buying is telling us two things. The market reaction may be overly harsh, and Advanced Flower could recover from these mishaps and get back on track. Importantly, buyers include the CEO and Leonard Tannebaum, the founder of the private equity shop Tannenbaum Capital Group, which has played a key role in creating Advanced Flower. Down here, the company pays a 15.9% yield.
Chicago Atlantic Real Estate Finance (REFI)
In early October, officer and director John Mazarakis put $93,225 into this stock at 12.43. That’s not the only insider signal on this company (see below). The company pays a 14.9% yield.
Chicago Atlantic BDC (LIEN)
While Chicago Atlantic Real Estate Finance is a Real Estate Investment Company (REIT), Chicago Atlantic BDC is a business development company (BDC). Both get a break on taxes as long as they pass most of their income through to investors in the form of a dividend. One difference is that REITs can create more complications at tax time for investors. Otherwise, these two are essentially under the same management, and they make similar investments in the cannabis sector.
Since April, insiders have put over $60,000 into Chicago Atlantic BDC at 10.17 to 11.23. That’s relatively small. But in insider analysis, you have to look at the quality of the purchase, not only the size. These purchases have several bullish qualities.
There is a cluster buy of several insiders. Cluster buys are bullish. Next, buyers include the CEO and other C-suite managers, like the chief investment officer and the president. Generally, C-suite purchases are more meaningful than director purchases or buys by beneficial owners (deemed insiders because they own a lot of stock). The most recent purchase here was in the middle of September by the CEO at 11.43. The company pays a 12.8% yield.
Looking beyond insider buying, here is some other portfolio company news.
Curaleaf (CURLF)
Curaleaf recently expanded its Anthem line of cannabis products by rolling out Anthem Bold, an infused pre-roll product. Anthem Bold delivers premium, high-potency flower for consumers “looking to elevate any evening,” says the company. Anthem Bold offers a mix of THCA and terpenes, which push potency to around 40% THC. The product is available at Curaleaf stores in Arizona, Illinois, New Jersey and New York. Curaleaf will also do a wholesale rollout. It launched the Anthem line in April with Anthem Classic.
Green Thumb Industries (GTBIF)
Green Thumb recently opened a RISE store in Lebanon, PA. The company now has 18 stores in the state, as it continues to build out capacity ahead of expected recreational-use legalization at some point in the next year or two.
Tilray Brands (TLRY)
Tilray recently expanded its line of medical cannabis products made in its Neumünster production plant in Germany. It expanded the Tilray Craft line by adding new flower products called Triangle Mints, Platinum Pave 34 and Sunset Sherbet. The move comes as medical cannabis sales in Germany continue to take off, and other European countries consider legalizing medical cannabis, which analysts predict will be the fastest-growing market over the next decade. Tilray’s German plant meets European production standards, which means it could serve other European countries out of its German facility.
Verano (VRNOF)
Verano recently inked a $75 million financing deal with Chicago Atlantic Real Estate Finance. An unnamed regional bank participated in establishing the revolving credit facility.
Verano immediately used the credit line to refinance $50 million in senior secured debt at a lower interest rate, with no prepayment penalty. It says it will use the other $25 million to fund “strategic initiatives.” The credit line is secured by real estate. The move strengthens Verano’s balance sheet by leveraging its real estate, said Verano founder and CEO George Archos.
The interest rate is the Secured Overnight Financing Rate of around 4.2% plus 6%. The credit line expires on September 29, 2028. A revolving credit facility is a flexible loan that allows a borrower to draw, repay, and redraw funds up to a predetermined limit.
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