Moving on Up
U.S. canna preps for U.S. exchanges.
Recent Recap
The specter of uplisting, which we flagged last week as potentially happening ‘sooner than most people think, has been confirmed by Curaleaf Chairman/ CEO Boris Jordan.
His take is consistent with the milestones by the midterms mantra that we’ve discussed since the December rug. While some perceive Cura’s reverse-split as a negative, with Canadian precedent coloring perception, their raison d’être is entirely different.
We don’t know when we’ll get public guidance from federal agencies but it’s clear that the feds are already guiding, and it remains to be seen who the first mover is.
Some think it will be Curaleaf, while Green Thumb, Trulieve and Glass House have also been mentioned, but it doesn’t matter because as soon as the first bird flies, the most liquid U.S. vehicle, MSOS, should migrate higher bc what’s good for the goose...
Summer Solstice Approaching
The ALJ AU hearing starts in a month (will be done in six weeks), there are 196 days until the midterms, MMJ is already rescheduled to S3 (a prohibitionist lawsuit tossed late Friday) and per multiple sources, the U.S. exchanges are now ‘open for business.’
Plus, we’ve been told the IRS may be waiting until AU 280E to officially ends before any potential settlements—including the possible vacation of MMJ back-taxes. 👀
All the while, the U.S. cannabis sector is a ghost town liquidity wise, which pretty much makes it digital catnip for the 🤖😼 that still dominate the space without the pipes (custody) that will be the precursors to real liquidity and, for some, eventual uplisting.
Chart Check: MSOS
The world’s most maligned ETF continues to base above a cluster of moving averages after several back-tests and while the ETF is +51% off the it’s March lows, it hasn’t felt like it that given the lethargy, apathy, and frustration from those still in the game.
Chart Check: Glass House Brands
Breaking out of a 3-yr base, there’s a lot of potential growth on the horizon for this low-cost Cali player, including exports and their hemp/CBD/UC-Berkeley partnership.
Meanwhile…
Top Stories
Federal Judge Dismisses Prohibitionist Lawsuit Challenging Medicare CBD
Canna Dispensaries and Legalization Linked to Fewer Nonfatal Opioid Poisonings
Cannabis Banking and Major Exchange Listings Don’t Need a New Law. They Need Updated Guidance
SAFE Banking Act Nowhere to Be Found in Wake of Schedule III Cannabis Order
Marijuana Policy Project Expects No Major Changes In Hemp Ban This Year
Illinois Lawmakers Roll Out Broad Cannabis Industry Overhaul
Canada Canna Sales Reach C$471M In March, C$1.4B In Q1 2026
Thailand’s Medical Cannabis Rx Rules Limited Impact On Street-Level Access
98% of UK mental health patients report improvement from medical cannabis
Industry Headlines
Vireo Growth Inc. to Acquire Bridgewell Agribusiness LLC
Curaleaf Announces 1-for-3 Reverse Stock Split in Preparation for U.S. Stock Exchange Uplisting 👇
ATB on Curaleaf
We view this as a bullish sign MSOs are actively preparing for uplisting, which may become feasible following full rescheduling. View is they wouldn’t do this if they didn’t have intel. Has to be minimum price of $4, hence the move and preparation.
^ the rescheduling hearing runs from June 29 to July 15, with a final ruling expected in Q3 2026. Uplisting to the NASDAQ or NYSE would serve as a major sector catalyst by enabling broader institutional investment.
Uplisting isn’t possible today bc we only have MMJ rescheduling. However, we expect full rescheduling Q3 (we believe late August), would potentially allow for the uplisting.
We wouldn’t be surprised if certain other companies also consolidate shares (notably MSOs with a lower share price, such as VRNO, CL, TSND, JUSH, AAWH).
Companies are doing everything they can to prepare for potential uplistings (e.g., we’ve recently seen several MSOs announce redomiciling to the US from Canada).
Bloomberg Intelligence
Proposed US rescheduling of medical-use marijuana is poised to reshape the $40B global cannabis market by materially improving producer economics through tax relief, particularly for medical-heavy US operators such as Trulieve, Curaleaf and Green Thumb, while potentially catalyzing increased M&A.
Meanwhile, sales outside the US appear set to soar at a double-digit rate thanks to expanding markets, led by Germany and Thailand.
AGP: Clarity on Cannabis Expected in Coming Months
After Q1 earnings and conversations with management teams and stakeholders within cannabis, we update some of our high-level thoughts on where we stand today in cannabis and where things could shift in the near-term to medium-term.
Phase 1 of rescheduling (FDA and state-medical cannabis) is effective, though we remain in a state of some uncertainty with Phase II (whole plant) pending – and we discuss why we believe Phase II will come to fruition below.
Near-term, the continued grey area could keep some investors on the sidelines, though we believe there is increasing evidence for a number of catalysts to come to fruition from the end of summer/fall, through the end of year, starting with the Phase II of rescheduling (whole plant) post the ALJ hearing ending July 15.
Assuming Phase II of rescheduling comes relatively soon after the hearing ending, a key question will then become what more opens up for operators that engage in both medical and adult use cannabis and if there will be a route for these operators to list on major exchanges w/o meaningful incremental federal reform. We believe this will open up meaningful opportunities for improved liquidity, institutional ownership, and strategic M&A/partnerships.
The combination of uplisting with a return to improved fundamentals, (hemp ban coming into effect Nov 2026, additional states legalizing and M&A) could create a goldilocks scenario for cannabis stock multiples to re-rate.
Despite the uncertainty of how things exactly play out in the near-term, we believe the known factors of debts having been refinanced and 280E not being applicable to medical make for an attractive risk/reward set up with MSOs trading at an average double-digit 2026 FCF yield and ~6x EV/EBITDA, particularly for companies with a clean BS, generating cash flow, with catalysts ahead.
Stems & Seeds
Have a safe journey, please enjoy responsibly.
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CB1 has positions in/ advises some of the companies mentioned and nothing contained herein should be considered advice.