Core Viewpoint - The potential reclassification of marijuana from Schedule I to Schedule III by the Trump administration could significantly impact the cannabis industry, unlocking new investment opportunities and tax benefits while also facilitating research on marijuana [4][5][22]. Group 1: Economic Impact - Reclassification could lead to billions in untapped potential in the hemp industry, positively affecting the U.S. economy and stock market [4]. - Cannabis businesses would gain access to major tax breaks, allowing them to deduct normal business expenses, which could result in significant tax savings [3]. - The reclassification may help normalize the cannabis industry in the eyes of mainstream investors, potentially increasing investment interest [2][12]. Group 2: Research Opportunities - The change would simplify federally approved research on marijuana, enabling scientists to explore new use cases and markets [2][22]. - Currently, research on Schedule I drugs is highly restricted, limiting the ability of companies to innovate within the cannabis sector [2][6]. Group 3: Market Sentiment and Trends - Support for cannabis legalization has grown, with approximately 64% of Americans favoring legalization, although this is a slight decrease from 68% in 2024 [11]. - The cannabis industry is characterized by volatility, with stocks often experiencing significant price swings in response to policy news [13][22]. Group 4: Investment Considerations - Investors should carefully consider their exposure level, as different types of cannabis stocks (growers, dispensaries, ETFs, pharmaceutical companies) come with varying risk and growth potential [18]. - The cannabis industry remains emerging and risky, with the timeline for federal legalization or banking reform still uncertain [22].

Industry Overview - The cannabis industry has experienced significant growth, with marijuana usage evolving over the years, leading to increased investment opportunities [1][3] - The volatility in marijuana stocks remains high, making it challenging for investors to realize sustainable profits [2][3] Company Highlights Cresco Labs Inc. - Cresco Labs reported a strong Q3 2025, maintaining market dominance and unlocking new growth opportunities [5] - Key financial metrics for Q3 2025 include: - Revenue of $165 million - Operating cash flow of $6 million - Gross profit of $79 million - Adjusted gross profit of $80 million with an adjusted gross margin of 48.8% - SG&A expenses of $52 million, representing 31.3% of revenue - Net loss of $22 million, which includes a $16 million loss from debt extinguishment and $2 million in non-cash impairment charges - Adjusted EBITDA of $40 million with an adjusted EBITDA margin of 24.1% [8] Trulieve Cannabis Corp. - Trulieve operates as a cannabis retailer, cultivating, processing, and distributing cannabis products [9] - On November 4th, Trulieve announced a notice of redemption for all US$368 million of its 8.0% senior secured notes due 2026, which will be delisted from the Canadian Securities Exchange [11] Verano Holdings Corp. - Verano operates as a vertically integrated multi-state cannabis operator in the U.S. [11] - On November 6th, Verano announced an exclusive partnership with Raw Gardens, allowing it to sell Raw Garden-branded products in New Jersey [12]

Core Insights - The cannabis investment sector has seen significant coverage and analysis through the 420 Investor platform, which has transitioned to Seeking Alpha in 2023, enhancing its reach and resources for investors [1] Group 1: Company Overview - 420 Investor was launched in 2013, coinciding with Colorado's legalization of cannabis for adult use, and has provided extensive resources including model portfolios and educational materials for investors [1] - Alan Brochstein, a prominent figure in cannabis investment, founded AB Analytical Services in 2007 and has been managing the 420 Investor group since its inception [1] Group 2: Investment Features - The 420 Investor group closely monitors 20 cannabis stocks, providing timely investment news, earnings report previews, and post-report analyses [1] - Additional resources offered by the group include a model portfolio, 10 weekly videos with chart analysis, three weekly summary pieces, a monthly newsletter, and a chat feature for investor inquiries [1]

Financial Data and Key Metrics Changes - The loan portfolio principal totaled approximately $400 million as of September 30, 2025, with a weighted average yield to maturity of 16.5%, down from 16.8% in the previous quarter [10] - Net interest income for Q3 2025 was $13.7 million, a decrease of 5.1% from $14.4 million in Q2 2025, primarily due to non-recurring fees and the impact of a 25 basis point rate cut [13][14] - Distributable earnings per weighted average share were approximately $0.50 and $0.49 for basic and fully diluted shares, respectively, a modest decrease from $0.52 and $0.51 in the previous quarter [15] Business Line Data and Key Metrics Changes - Gross originations during the quarter were $39.5 million, with $11 million advanced to a new borrower and $20 million related to a new credit facility [10] - The portfolio consisted of 36.7% fixed-rate loans and 63.3% floating-rate loans, with only 14% exposed to further rate declines due to interest rate floors [11] Market Data and Key Metrics Changes - The company noted challenges in private credit markets, including declining interest rates and concerns over underwriting standards, which have led to trading at a discount to book value [6] - The cannabis pipeline currently stands at approximately $441 million, diversified across various growth investments and market activities [7] Company Strategy and Development Direction - The company focuses on principal protection and disciplined capital deployment in limited license jurisdictions, supporting fundamentally sound growth initiatives [7] - Management expressed confidence in the cannabis sector and the company's strategy, highlighting a robust platform to meet industry growth [8] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the volatile private credit environment but emphasized consistent execution and performance [5] - The company is optimistic about the cannabis market, particularly in states like Virginia, which is seen as an attractive market for future growth [24] Other Important Information - Total leverage was 33% of book equity as of September 30, down from 39% in the previous quarter [12] - The company expects to maintain a dividend payout ratio of 90% to 100% for the 2025 tax year, with potential special dividends if taxable income requires it [15] Q&A Session Summary Question: Discussion on the pipeline and ESOP opportunities - Management confirmed that ESOPs continue to be a significant part of the pipeline, with no significant exits other than normal turnover [19] Question: Update on maturing loans - Management is negotiating terms to extend maturing loans and expects to retain the majority of them [21] Question: Opportunities in Virginia's cannabis market - Management views Virginia as an attractive market due to its controlled licensure structure and potential for recreational market growth [24] Question: Underwriting approach and success factors - Management highlighted a focus on limited license jurisdictions and operators with diverse earnings streams as key to their underwriting success [28] Question: Lending program update for New York - The New York Social Equity Fund has opted not to draw additional capital, but the company is ready to support future deployments [56]

Financial Data and Key Metrics Changes - The loan portfolio principal totaled approximately $400 million as of September 30, 2025, with a weighted average yield to maturity of 16.5%, down from 16.8% in the previous quarter [9] - Net interest income for Q3 2025 was $13.7 million, a 5.1% decrease from $14.4 million in Q2 2025, primarily due to non-recurring fees and the impact of a 25 basis point rate cut [11] - Distributable earnings per weighted average share were approximately $0.50 and $0.49 for basic and fully diluted shares, respectively, a slight decrease from $0.52 and $0.51 in the previous quarter [13] Business Line Data and Key Metrics Changes - Gross originations during the quarter were $39.5 million, with $11 million advanced to a new borrower and $20 million related to the new Verano credit facility [9] - The portfolio consisted of 36.7% fixed-rate loans and 63.3% floating-rate loans, with only 14% exposed to further rate declines due to interest rate floors [10] Market Data and Key Metrics Changes - The company noted challenges in private credit markets, including declining interest rates and high-profile failures in the syndicated loan market, which have affected investor sentiment [5] - The company has a cannabis pipeline valued at approximately $441 million, diversified across various growth investments and restructuring activities [6] Company Strategy and Development Direction - The company focuses on principal protection and disciplined capital deployment in limited-licensed jurisdictions, aiming to support fundamentally sound growth initiatives [6] - The management team executed share repurchases, indicating confidence in the company's strategy and portfolio [8] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the cannabis market, particularly in Virginia, which is seen as an attractive medical and potential recreational market [21] - The company is well-insulated against interest rate declines, with a significant portion of its portfolio protected by rate floors [10] Other Important Information - The company expects to maintain a dividend payout ratio of 90%-100% for the 2025 tax year, with potential special dividends if taxable income requires additional distributions [13] Q&A Session Summary Question: Discussion on the pipeline and potential originations - Management confirmed that ESOPs continue to be a significant part of the pipeline, with no significant exits other than ordinary churn [17] Question: Update on loans maturing before year-end - Management is negotiating terms to extend the majority of loans maturing before year-end [19] Question: Opportunities in Virginia's cannabis market - Management views Virginia as an attractive market and plans to expand relationships and deploy capital as opportunities arise [21] Question: Approach to underwriting and success factors - The company focuses on market analysis, limited license jurisdictions, and conservative leverage levels to ensure credit quality and principal protection [26][29] Question: Competition from regional banks in the cannabis sector - Management acknowledged increased competition from banks that have developed expertise in the cannabis space, viewing them as partners in the lending ecosystem [50] Question: Update on lending program to New York - The New York Social Equity Fund has paused additional capital draws, but the company is ready to support further deployments if needed [54]

Core Insights - The article discusses the transition of the 420 Investor service to Seeking Alpha, highlighting its historical focus on the cannabis sector and its offerings to investors [1] Group 1: Company Overview - 420 Investor was launched in 2013, coinciding with Colorado's legalization of cannabis for adult use [1] - The service has provided extensive coverage of cannabis stocks, including model portfolios, videos, and written materials to educate investors [1] - Alan Brochstein, CFA, is a prominent figure in the cannabis investment space, having founded AB Analytical Services in 2007 and managing New Cannabis Ventures since 2015 [1] Group 2: Investment Features - The investing group 420 Investor closely monitors 20 cannabis stocks, providing timely investment news, earnings report previews, and post-report analyses [1] - Additional features of the group include a model portfolio, 10 weekly videos with chart analysis, three weekly summary pieces, a monthly newsletter, and a chat function for investor inquiries [1]

Group 1 - Alan Brochstein is a pioneer in the cannabis investment sector, starting his career in the securities industry in 1986 and founding AB Analytical Services in 2007 to provide consulting for investment advisors [1] - He has been managing the investing group 420 Investor since 2013, focusing on publicly-traded cannabis stocks and moving the group to Seeking Alpha in 2023 [2] - The 420 Investor group covers 20 stocks, providing investment news, earnings report previews, and post-report analyses, along with a model portfolio and multiple weekly video analyses [2] Group 2 - New Cannabis Ventures, co-managed by Alan, has been a key provider of financial information in the cannabis industry since 2015 [1] - The investing group offers a monthly newsletter and a chat feature for investor questions, enhancing community engagement [2]

Alan Brochstein, CFA, is one of the first investment professionals to focus exclusively on the cannabis industry. Alan got his start as a financial professional in the securities industry in 1986, managing investments in institutional environments until he founded AB Analytical Services in 2007 in order to provide independent consulting to registered investment advisors. He is also the managing partner of New Cannabis Ventures, a leading provider of relevant financial information in the cannabis industry si ...

Group 1 - Alan Brochstein is a pioneer in the cannabis investment sector, starting his career in the securities industry in 1986 and founding AB Analytical Services in 2007 to provide consulting for investment advisors [1] - He has been managing the investing group 420 Investor since 2013, focusing on publicly-traded cannabis stocks and providing detailed analysis and investment news [2] - The 420 Investor group includes features such as a model portfolio, weekly video analyses, summary pieces, a monthly newsletter, and a chat for investor inquiries [2] Group 2 - Alan Brochstein is also the managing partner of New Cannabis Ventures, which has been a key provider of financial information in the cannabis industry since 2015 [1] - The investing group closely monitors 20 cannabis stocks, offering previews and analyses of their earnings reports as they are released [2] - The group transitioned to Seeking Alpha in 2023, indicating a shift in its platform for reaching investors [2]

Group 1 - Alan Brochstein is a pioneer in the cannabis investment sector, starting his career in the securities industry in 1986 and founding AB Analytical Services in 2007 to provide consulting for investment advisors [1] - He has been managing the investing group 420 Investor since 2013, focusing on publicly-traded cannabis stocks and moving the group to Seeking Alpha in 2023 [2] - The 420 Investor group covers 20 stocks, providing investment news, earnings report previews, and post-report analyses, along with a model portfolio and multiple weekly video analyses [2] Group 2 - New Cannabis Ventures, co-managed by Alan, has been a key provider of financial information in the cannabis industry since 2015 [1] - The investing group offers a monthly newsletter and a chat feature for investor questions, enhancing community engagement [2]