Money is moving into cannabis stocks at a pace the sector hasn't seen in years, and the AdvisorShares Pure US Cannabis ETF (MSOS) is the clearest signal of it. As of May 31, the fund posted a 103.7% one-year NAV return, dwarfing the North American Marijuana Index's 36.9% gain and the S&P 500's 29.8%. MSOS has also climbed 28% over the past three months while the broader marijuana benchmark actually slipped about 1% - a divergence that tells you this rally is concentrated, not sector-wide.
What's driving the concentration is a mix of regulatory anticipation and one very tangible corporate milestone. Trulieve Cannabis, which makes up roughly 30% of MSOS assets, began trading on the NYSE under the ticker TRLV, a listing CEO Kim Rivers called a "historic milestone." That move followed a corporate restructuring in which Trulieve separated its medical cannabis operations from its adult-use business - a maneuver that made it eligible for a senior U.S. exchange in the first place. For operators watching from state-legal markets, that kind of structural separation matters as much operationally as it does symbolically; back-office systems, from seed-to-sale tracking to a compliant cannabis pos system california operators rely on for daily transactions, all have to reconcile cleanly across business lines before an exchange listing becomes plausible. cannabis pos system california
Alliance Global, holding a 'Buy' rating and a C$27 price target on Trulieve, points to the company's concentration in medical-only states and its exposure to expanding medical markets like Texas and Georgia as a genuine competitive edge. That's a fair read. Medical-only markets carry different compliance burdens - tighter patient verification, different packaging and labeling rules, often lower excise tax exposure than adult-use - and companies built around that infrastructure are arguably better positioned as more states inch toward broader access.
Why the DEA Hearing Looms So Large
The administrative hearing scheduled for June 29, expected to run no later than July 15, will examine whether cannabis products beyond medical marijuana - including adult-use - should move to Schedule III. This isn't a small procedural footnote. Rescheduling to Schedule III would extend the tax relief already granted to state-licensed medical operators in April, when Acting Attorney General Todd Blanche moved medical marijuana into that category. That single action eliminated the harshest teeth of Section 280E for medical operators, allowing them to deduct ordinary business expenses - payroll, rent, interest - that federal tax code had long denied cannabis companies solely because of their Schedule I status. President Trump's formal nomination of Blanche to serve as permanent attorney general has only added to investor confidence that this regulatory direction holds.
For multi-state operators still selling adult-use product, the stakes of a broader Schedule III move are larger still. Full 280E relief across adult-use lines would materially improve free cash flow and balance-sheet strength, according to AdvisorShares, while also opening doors to banking services and institutional capital that have been effectively closed to plant-touching businesses for years. Roth Capital called the current rescheduling order "extremely favorable," citing benefits across taxation, capital access, and what could become a wave of uplistings to senior exchanges.
Financing and Uplisting Activity Picks Up
Cresco Labs' new $50 million revolving credit facility from Needham Bank, secured this week, is an early test case of what that access looks like in practice. CEO Charlie Bachtell described it as a "powerful, non-dilutive tool" for funding acquisitions while positioning the company for U.S. capital markets and a future senior-exchange listing. Tilray Brands, not an MSOS holding but clearly watching the same regulatory calendar, has signaled it may direct proceeds from a recent at-the-market program toward acquisitions and expansion.
- Verano (VRNO): 195% upside to price target, the highest among MSOS holdings tracked
- Jushi Holdings (JUSHF): 183% upside
- Cresco Labs (CRLBF): nearly 99% upside
- Green Thumb Industries (GTBIF): 70% upside, notably higher than Trulieve or Curaleaf
What Operators and Investors Should Watch
Retail sentiment on platforms like Stocktwits shows extremely bullish positioning on MSOS, Trulieve, and Green Thumb, with high message volume across most major holdings. That enthusiasm is understandable given the tax and capital-access stakes, but it's worth separating market sentiment from operational reality. A favorable hearing outcome doesn't rewrite state licensing caps, doesn't simplify METRC compliance, and doesn't eliminate the patchwork of local zoning and advertising restrictions dispensaries navigate daily. What it would do is ease the tax burden and capital constraints that have made scaling - and in some cases simply staying solvent - unusually difficult for licensed cannabis businesses compared to any other regulated retail category.
