Group 1 - The cannabis industry, including multi-state operator Cresco Labs, is facing significant challenges such as black- and gray-market competition, limited access to financial services, and high taxation [1][2] - Cresco Labs' stock performance has been poor, with a $1,000 investment in the stock shrinking to approximately $200 over the past five years, while the S&P 500 index would have grown to $1,878 in the same period [2] - The legal status of cannabis in the U.S. is complicated, with federal illegality contrasted by varying state laws, leading to a patchwork of legalization across the country [4] Group 2 - There is ongoing lobbying for federal rescheduling of marijuana, but it is not a priority for lawmakers, leaving companies like Cresco in a survival mode [5] - Cresco Labs is experiencing declining revenue and ongoing challenges with profitability, although it has recently refinanced a $325 million credit facility and holds $147 million in cash and equivalents [6]

Core Insights - The prospects for marijuana legalization in the U.S. are facing setbacks due to opposition from influential legislators, negatively impacting cannabis stocks like Curaleaf [1][4] - President Trump is considering a measure to reschedule marijuana, which could lead to its de facto legalization at the federal level [2] - A group of nine Congress members, led by Congressman Pete Sessions, is actively opposing the rescheduling of marijuana, citing concerns over its impact on children and potential benefits to the marijuana industry [3][4] Industry Sentiment - The sentiment in the cannabis industry is currently negative, as evidenced by the decline in Curaleaf's stock price, which fell over 2% on a day when the S&P 500 only dropped 0.6% [1] - The ongoing debate and legislative pushback create uncertainty for cannabis operators, hindering their growth and access to financial services [4] Legislative Developments - The proposed rescheduling of marijuana by the DEA could eliminate its classification as a harmful drug, which is supported by public opinion but faces significant legislative opposition [2][3] - The letter sent to President Trump by Congress members highlights the political divide on marijuana legalization and the potential implications for the industry [3][4]

If cannabis is no longer a Schedule I drug, that could result in significant tax savings for many marijuana producers. Trump is reportedly looking at rescheduling cannabis to a lower level, possibly Schedule III, which includes testosterone, ketamine, and anabolic steroids. This is not a new development, as there were hopes that reclassification would have taken place under former President Joe Biden. It was back in October 2022 when Biden first asked for the Department of Health and Human Services to revie ...

Group 1 - The movement towards marijuana legalization in the U.S. has gained momentum, positively impacting shares of multistate operators like Curaleaf, which saw a gain of over 10% [1] - President Trump is considering a federal proposal to reclassify marijuana as a less harmful drug, indicating potential changes in federal policy [2] - Republican Congressman Greg Steube has introduced the "Marijuana 1-to-3 Act," aiming to reschedule marijuana from Schedule 1 to Schedule 3, which would effectively legalize it within 60 days of passing [3] Group 2 - Steube has been a long-time advocate for marijuana reform, emphasizing that loosening restrictions would significantly expand research opportunities [4] - Public support for marijuana legalization has increased dramatically, with a Gallup survey indicating 68% support in 2024, up from 36% in 2005, reflecting a shift in societal attitudes towards the drug [4]

Will Trump Reclassify Marijuana? Here’s What To Know As He Weighs Loosened Restrictions https://t.co/GdYZVvAsSv ...

Core Viewpoint - The marijuana industry is currently facing challenges, but Trulieve Cannabis is positioned as a potential contrarian investment opportunity despite its recent struggles [1][2]. Company Performance - Trulieve's stock has significantly declined, with a $1,000 investment three years ago now worth approximately $610 [2]. - In the second quarter, Trulieve reported a non-GAAP adjusted net loss of $8 million, compared to breakeven the previous year, while maintaining revenue at $302 million [3]. - The company has opened three new dispensaries during the quarter, two in Florida and one in Ohio, indicating ongoing expansion [4]. Financial Health - Trulieve is cash flow-positive, with cash, equivalents, and restricted cash increasing by nearly 13% year over year to $401 million [4]. Industry Outlook - There is potential for reform in marijuana laws, with ongoing discussions about decriminalization by the DEA and a financial services reform bill, supported by public demand for change [5]. - Long-term investors in Trulieve are expected to see rewards as the industry evolves [6].

Will Trump Reclassify Marijuana? Here’s What To Know As He Weighs Loosened Restrictionshttps://t.co/xdmcglvQDd https://t.co/Zm4E4EtNEg ...

Core Viewpoint - Cannabis stocks and ETFs experienced significant gains following reports that U.S. President Donald Trump is considering reclassifying marijuana to a less restrictive category, which could have major implications for the industry [1][2]. Industry Impact - The potential reclassification would move marijuana from Schedule I to Schedule III, allowing cannabis companies to claim standard business tax deductions and credits, expand access to banking, and facilitate more medical research [2][6]. - A Schedule III classification could ease banking restrictions, providing businesses with better access to banking services and attracting more investors [6]. - The reclassification could shift public perception, further legitimizing the medical cannabis industry and paving the way for broader acceptance and use of marijuana as a therapeutic agent [6][7]. - Nearly 40 states in the U.S. have already legalized marijuana in various capacities, and a federal shift could encourage more states to consider legalization [7]. Market Reaction - Following the news, cannabis stocks saw substantial increases: Trulieve Cannabis Corp. surged 35%, Tilray jumped 32%, Curaleaf Holdings climbed 29%, and Canopy Growth gained 24% [3]. - In the ETF market, Roundhill Cannabis ETF rose 29.4%, Amplify Seymour Cannabis ETF increased by 27.8%, and Amplify Alternative Harvest ETF gained 27.0% [4]. ETF Details - **Roundhill Cannabis ETF (WEED)**: Concentrated exposure to leading U.S. cannabis companies, with an asset base of $6.4 million and an average daily trading volume of 42,000 shares [9]. - **Amplify Seymour Cannabis ETF (CNBS)**: Actively managed fund with diversified U.S. exposure, holding 32 securities and an asset base of $76.2 million, trading an average of 11,000 shares daily [10]. - **Amplify Alternative Harvest ETF (MJ)**: First ETF focusing on the global cannabis industry, with an asset base of $128.5 million and an average daily volume of 54,000 shares [12]. - **AdvisorShares Pure US Cannabis ETF (MSOS)**: Actively managed ETF focusing on U.S. companies, with an asset base of $521 million and an average daily volume of $9.4 million shares [13]. - **AdvisorShares Pure Cannabis ETF (YOLO)**: Actively managed fund with a focus on both domestic and foreign cannabis equity securities, holding 22 stocks with an asset base of $31.3 million and an average daily volume of 55,000 shares [14].

Group 1 - A coalition of 32 attorneys general from various U.S. states and territories is advocating for the passage of a marijuana banking bill to reform current banking laws affecting cannabis businesses [2][5] - The proposed SAFER Banking Act aims to provide cannabis businesses with access to essential financial services, which they currently lack due to federal illegality, forcing many to operate on a cash-only basis and increasing crime risks [4] - The bipartisan support for marijuana legalization is reflected in the diverse backgrounds of the attorneys general, indicating broad public support for reform [5] Group 2 - Curaleaf's stock experienced a significant increase of 13% in response to the renewed political push for marijuana banking reform, contrasting with the S&P 500's modest gain of 0.4% [1] - The ongoing pressure for change in marijuana banking laws is viewed positively for the cannabis industry, despite the slow progress in Congressional reform efforts [6]

Group 1 - Alliance Global Partners has cut its price target for Tilray Brands (TLRY) stock by 25%, from $1 to $0.75 per share, citing softness in international cannabis and alcohol sales [1][3] - Despite the price target cut, Tilray's stock price increased by 15.8% as of 2:05 p.m. ET on Tuesday, indicating an unexpected investor reaction [1][3] - Tilray generates 25% of its revenue and 40% of its gross profit from alcoholic beverages, which is significant for its overall financial performance [3] Group 2 - Tilray has not reported a profit since 2018 and has never generated positive free cash flow (FCF) [4][5] - Analysts do not expect Tilray to become profitable before 2029, although there are forecasts for positive FCF in 2026 [5] - Given the company's historical performance, there is skepticism regarding its ability to achieve positive FCF in the near future, leading to a recommendation to sell the stock [5]