Core Insights - The U.S. cannabis sector is evolving with regulatory momentum, and strong operators are positioning for long-term growth as of January 2026 [1] Group 1: Trulieve Cannabis Corp. - Trulieve Cannabis Corp. is a leading multistate operator with a dominant presence in Florida and over 190 dispensaries nationwide, supporting strong brand recognition and retail traffic [2][4] - The company emphasizes vertical integration and customer loyalty programs, which contribute to strong repeat customer visits and controlled expansion [2][4] - Financially, Trulieve focuses on stability, generating strong quarterly revenue and maintaining high gross margins, while also producing positive operating cash flow and reducing debt [4] Group 2: Curaleaf Holdings, Inc. - Curaleaf Holdings, Inc. operates approximately 150 dispensaries across key markets such as Florida, Massachusetts, New York, and California, with extensive cultivation and processing facilities [6][8] - The company offers a diverse product portfolio and is expanding internationally, which diversifies revenue sources beyond the U.S. market [6][8] - Despite facing pricing competition and regulatory costs, Curaleaf generates positive operating cash flow and is focusing on cost reductions to stabilize profitability [8] Group 3: Cresco Labs Inc. - Cresco Labs Inc. is known for its branded product strategy and operates in high-value U.S. markets, including Illinois and Pennsylvania, with a strong emphasis on wholesale distribution [9][11] - The company's recent financial performance shows stable quarterly revenue and narrowing net losses, indicating potential stabilization despite industry headwinds [11] - Cresco benefits from improving wholesale demand and may gain from potential federal policy developments that could enhance profitability [11]

Core Viewpoint - Pot Inc. is lobbying the Trump administration, arguing that Wall Street is obstructing the implementation of the president's executive order that classifies marijuana as a medical drug [1][6]. Group 1: Executive Order and Banking Issues - The Trump executive order reclassifies marijuana from a Schedule 1 drug to a Schedule 3 drug, similar to Tylenol with codeine, but does not grant banks the authority to provide services to the marijuana industry [2][4]. - Major banks, including JPMorgan, Bank of America, and Citigroup, have expressed that they cannot support the marijuana industry until it is formally classified as a Schedule III drug and the law changes [4][5]. - The U.S. Attorney General Pam Bondi has yet to finalize the executive order, which is necessary for full implementation [4]. Group 2: Market Potential and Advocacy - The recreational marijuana market, which includes products like joints and gummies, is not addressed in the executive order, leading to concerns from bankers about their ability to support this segment [3][4]. - Marc Cohodes, a former hedge fund manager, argues that banks are misinterpreting the executive order and emphasizes the need for banking services in the medical marijuana sector, which is projected to be a $35 billion market [10][14]. - Pot Inc. is a $60 billion industry, and advocates believe that the reclassification will lead to significant growth opportunities for dispensaries and related businesses [14][15]. Group 3: Exchange Listings and Regulatory Challenges - Current policies of major U.S. stock exchanges, such as NYSE and Nasdaq, prevent the listing of U.S. marijuana companies, although Canadian companies are listed due to their foreign domicile [5][7]. - The inability to access banking services poses significant hurdles for marijuana companies in their expansion plans, as banking is heavily regulated at the federal level [15].

Core Insights - The U.S. cannabis sector is evolving despite regulatory uncertainty and pricing pressure, with leading multi-state operators like Trulieve, Verano, and The Cannabist Company standing out as key players to watch in 2026 [1] Trulieve Cannabis Corp. (TCNNF) - Trulieve is a dominant operator in the U.S. cannabis industry, employing a vertically integrated business model focused on retail, cultivation, and product manufacturing [2] - The company operates over 230 dispensaries, primarily in Florida, which anchors its revenue base, and has a strong loyalty program that supports consistent foot traffic [2][4] - Financially, Trulieve has shown steady revenue, strong gross margins, and positive operating cash flow, with a focus on efficiency and cash flow management [4] Verano Holdings Corp. (VRNOF) - Verano operates as a leading multi-state cannabis operator with a presence in over a dozen U.S. states, selling products under the Zen Leaf and MÜV brands [6] - The company has around 150 dispensaries and controls over one million square feet of production capacity, focusing on premium cannabis offerings [6][8] - Despite facing industry headwinds, Verano has maintained competitive gross margins and positive operating cash flow, with ongoing efforts in cost optimization and debt restructuring [8] The Cannabist Company Holdings Inc. (CNTMF) - The Cannabist Company, formerly Columbia Care, operates over 60 dispensaries and focuses on improving retail efficiency and product assortment [9] - The company is actively restructuring to enhance margins and has been negotiating debt modifications to improve financial flexibility [10][11] - While profitability remains a challenge, management is concentrating resources in higher-return markets, positioning Cannabist as a higher-risk turnaround opportunity [11] Overall Market Outlook - As of January 2026, U.S. cannabis stocks are characterized by volatility but present various investment opportunities, with Trulieve offering scale and cash flow strength, Verano providing balanced national exposure, and Cannabist representing a restructuring story with potential upside [12]

Industry Overview - 2026 is anticipated to be a significant year for the marijuana industry, particularly due to the rescheduling of cannabis by Donald Trump, which is expected to bring positive changes [1] - The speculation surrounding reform news often leads to increased trading activity in cannabis stocks, as investors look to capitalize on potential gains [2] - The growing consumer demand for cannabis, both medical and recreational, is driving companies to expand their operations [2] Company Highlights - **Glass House Brands Inc.** reported Q3 2025 earnings with revenue of $38.4 million, exceeding guidance but down from $63.8 million the previous year. The gross profit margin was 31%, significantly lower than 52% in Q3 2024 [9] - **Ayr Wellness Inc.** is undergoing a transition in leadership as it winds down its existing corporate entity and moves forward with new assets [11] - **Ascend Wellness Holdings, Inc.** announced a partnership with Mister Jones in New Jersey, marking a significant milestone under recent legislation. This partnership aims to ensure a steady product flow and support for retail space [14]

Core Viewpoint - The cannabis industry is poised for significant growth by 2026, especially following the rescheduling of cannabis to a Schedule III substance, which may enhance investor confidence and lead to substantial returns in marijuana stocks [1][2][3]. Industry Overview - The cannabis sector is transitioning towards a more corporate structure, benefiting larger multi-state operators (MSOs) while potentially squeezing out smaller craft and mom-and-pop operators [2][3]. - The new legislation may create opportunities for all players in the market, although concerns remain about the quality of products from larger MSOs compared to smaller growers [3]. Company Highlights - **Trulieve Cannabis Corp.**: Operates as a cannabis retailer, cultivating, processing, and distributing cannabis products through dispensaries and home delivery. The company expressed appreciation for the rescheduling of cannabis [4][6]. - **Curaleaf Holdings, Inc.**: Engages in the production and distribution of cannabis products both domestically and internationally. Recently opened its second dispensary in Erie, Pennsylvania, expanding its footprint to 18 stores in the state and 159 nationwide [8][10]. - **Cresco Labs Inc.**: Focuses on cultivating, manufacturing, and selling retail and medical cannabis products in the U.S. and Germany. The CEO highlighted the significance of cannabis being reclassified as a Schedule III substance, marking a cultural turning point for the industry [11][13].

Industry Overview - The marijuana sector is currently trading at low share prices, but upcoming reforms and rescheduling may lead to a rebound in stock prices [1][2] - The cannabis market is experiencing growth not only in the US but also in Canada and Europe, with Canada being the first country to fully legalize cannabis [1] Regulatory Changes - The US has reclassified cannabis as a Schedule 3 substance, which may facilitate collaboration with foreign markets and improve the public sector's growth prospects [2] - There is a call for legislative alignment with the new cannabis rescheduling to support safe banking reforms, which would enhance financial transaction security in the cannabis industry [5] Company Highlights - **Planet 13 Holdings Inc.** focuses on cultivating and providing cannabis products for medical and retail markets in the US and supports the new cannabis bill introduced by Trump [4][10] - **FLUENT Corp.** has sold its Pennsylvania operations for US$12.5 million, aiming to strengthen its balance sheet and focus on markets with greater opportunities [7][8] - **Glass House Brands Inc.** operates in retail, wholesale biomass, and cannabis-related consumer packaged goods, and supports the rescheduling of cannabis, viewing it as a significant drug reform [10]

Core Insights - The cannabis sector is expected to experience significant changes in stock performance in 2026, driven by the rescheduling of cannabis to a Class 3 substance, which may lead to improved business operations and stronger equity valuations [1][2] - Investor sentiment is anticipated to shift towards a focus on business performance rather than speculation, attracting long-term institutional investors who previously avoided the sector due to high risks [2][3] Industry Overview - The cannabis sector's growth will increasingly favor companies that demonstrate effective execution and responsible capital management, positioning themselves as sustainable consumer and healthcare businesses rather than merely regulatory trades [3] - More states are preparing to vote on cannabis legalization and other regulatory matters, indicating a potential ramp-up in market activity for the 2026 trading year [3] Company Highlights - **Tilray Brands, Inc.**: Engages in the research, cultivation, processing, and distribution of medical cannabis products across multiple regions, with a second quarter fiscal Year 2026 report scheduled for January 8 [4] - **Cronos Group Inc.**: Recently entered the Netherlands cannabis market through the acquisition of CanAdelaar B.V., Europe's largest adult-use cannabis company, which is expected to enhance its strategic footprint in Europe [7][9] - **Aurora Cannabis Inc.**: Launched a new product, Daily Special, in Germany, aimed at providing high-quality and affordable medical cannabis, showcasing its commitment to the European market [11]

Industry Overview - Donald Trump's executive order to move cannabis from Schedule I to Schedule III marks a significant change for the U.S. cannabis sector, altering its federal legal status and implications for operators, investors, and public markets [1] - The rescheduling is expected to eliminate IRS Section 280E, which currently restricts cannabis businesses from deducting standard operating expenses, leading to improved financial conditions for the industry [2] Financial Implications - The removal of Section 280E could enhance profit margins and cash flow for cannabis companies, strengthening their balance sheets and enabling reinvestment and consolidation [2] - Companies with strong fundamentals are likely to benefit the most as financial metrics normalize, attracting institutional capital and expanding analyst coverage over time [3] Investment Opportunities - Investors are advised to focus on operators with positive cash flow potential post-280E rather than engaging in broad speculation [3] - Several marijuana stocks are highlighted for potential investment, including Green Thumb Industries Inc., Ayr Wellness Inc., and Jushi Holdings Inc. [8] Company Highlights - **Green Thumb Industries Inc.** reported Q3 2025 revenue of $291.4 million, a 1.6% increase year-over-year, with a GAAP net income of $23.3 million and adjusted EBITDA of $80.2 million, representing 27.5% of revenue [9] - **Ayr Wellness Inc.** is undergoing restructuring under the Companies' Creditors Arrangement Act, transitioning core assets to a new acquisition vehicle owned by senior noteholders [10][12] - **Jushi Holdings Inc.** is a vertically integrated cannabis company involved in cultivation, processing, and retail, with recent amendments to the CEO's employment agreement approved by independent directors [14]

Market Overview - The market has experienced volatility, likened to the "Three Stooges," with tech stocks fluctuating significantly due to AI developments and inflation data [2][3] - The Consumer Price Index (CPI) indicated positive inflation trends, but concerns about data accuracy arose due to the government shutdown [3] - Unemployment rose to 4.6%, but this figure may be overstated, suggesting a more favorable employment situation [3] Job Market Insights - Jobless claims have shown a slight dip, providing a reliable indicator amidst other fluctuating data [4] - The overall market sentiment suggests a flat trajectory for December, with alternating good and bad news days expected [5] IPO Market Developments - Medline's IPO was the largest of the year, raising over $6 billion and marking the biggest IPO since Rivian in 2021, with a stock price increase of 40% [6] - Anticipation surrounds SpaceX's potential IPO, with speculation about a valuation of $1.5 trillion, although no timeline has been established [7][8] Cannabis Industry Updates - The signing of an executive order by President Trump reclassifies marijuana from a Schedule I to a Schedule III drug, allowing companies to deduct business expenses, potentially boosting cash flows by up to $150 million [11][12][13] - Despite initial stock price increases, marijuana stocks experienced a decline following the executive order, indicating a "buy the rumor, sell the news" scenario [11][14] - Many cannabis companies are involved in both farming and distribution, which may impact their operational strategies moving forward [15]

Core Perspective - The recent executive order signed by President Trump reclassifies marijuana to a "Schedule III" drug, significantly changing its legal status and implications for the industry [2][5]. Industry Implications - The reclassification allows the $60 billion marijuana industry in the US to access banking services, which were previously restricted due to its "Schedule I" status [6][9]. - Wall Street is expected to become more involved in the marijuana sector, providing easier financing options for companies that handle marijuana, moving away from reliance on alternative funding methods [7][10]. Regulatory and Economic Benefits - A Schedule III classification enables safer regulation of marijuana, potentially reducing income for drug cartels and increasing tax revenues as the industry expands [11]. - The medical community may benefit from increased marijuana use as an alternative to opioids, which are more dangerous and addictive [11]. Political Context - The move is seen as politically advantageous for Trump, appealing to a demographic of single-issue voters who support marijuana legalization [13][14]. - Public perception of marijuana has shifted, with many Americans viewing it as less dangerous than alcohol, aligning with the president's decision [14].