The Uplist: Part 2
The U.S cannabis normalization continues.
For part one of this article, click here.
Trulieve’s uplisting to the NYSE, the first of its kind in US history, has undoubtedly caught the attention of every large North American cannabis operator.
Since the industry’s inception, even the very largest operators have been effectively shut out of the highest tier of exchanges thanks to cannabis remaining in Schedule I of the Controlled Substances Act (CSA).
Now that this dynamic has begun to shift, another eight major operators have begun laying the groundwork to pursue a similar jump to the NYSE and the Nasdaq through reverse splits, redomiciles, scheduled shareholder votes, and conversations with investment bankers.
Yet, having seen the keyhole surgery Trulieve underwent to push an uplisting through, bifurcating its medical and adult-use operations entirely, the other eight are watching and waiting in the wings until the critical administrative law judge (ALJ) hearing later this month.
Should adult-use cannabis be extended to Schedule III alongside medical cannabis, these operators can bring their entire operations to market without undergoing similar surgery.
Todd Harrison, Founder of cannabis investment firm CB1 Capital, told Business of Cannabis:
“A lot of operators we’ve spoken to are going to wait until that ruling is done, so that they don’t have to bifurcate their medical operations… We have confidence that it’s going to happen.”
The ALJ hearing
April’s rescheduling order, which immediately moved cannabis under a state medical license to Schedule III, was explicitly framed as Phase 1 of a two-stage process.
Beginning June 29, a new expedited administrative hearing will consider the broader rescheduling of all cannabis from Schedule I to Schedule III, the fuller reform that the Biden administration had initiated and the Trump executive order had directed.
Its outcome will determine whether operators with unified medical and adult-use businesses can list on a major exchange without bifurcating, and, as such, whether Trulieve’s uplisting is a template or an anomaly.
Harrison believes that we’re ‘going to see a lot of operators start to uplist after the adult use hearings later this year’.
“Management teams are positioning… we were told last year by the president that rescheduling, banking, and clemency [will be] done by the midterms, and everything we’re hearing is consistent with that.”
Despite his confidence that full rescheduling is a formality, an emerging stack of litigation efforts could yet derail the process.
As we recently reported, three separate legal challenges have been filed in the DC Circuit Court since the April rescheduling order was signed, with challenges brought by cannabis critics, attorneys general, and from inside the cannabis industry.
Just because they can, doesn’t mean they will
Should these eight additional operators successfully uplist, it would mark the first time in the industry’s history that institutional capital has a legitimate pathway to invest in the cannabis market.
With these barriers removed, companies’ finances and operations will be exposed to invasive scrutiny. The question will no longer be how the industry accesses institutional capital, but whether it is investible.
Harrison, who has spent nearly a decade investing in cannabis businesses, believes three specific conditions need to be met before institutional investors are willing to engage meaningfully with the sector.
“I call them the three amigos,” he told Business of Cannabis. “It’s growth, regulatory parity, and tax clarity.”
The latter is potentially the most transformative for the sector. Section 280E of the Internal Revenue Code has subjected cannabis companies to effective tax rates that Jonathan Havens, Partner at Saul Ewing LLP, described at Cannabis Europa as ‘an 80% tax burden’ on some operators.
“US cannabis companies have been paying full tax liability on top-line revenue,” he said. “This is a huge change to the health of the P&L and the balance sheet.”
Rescheduling should relieve that burden for medical operators, but five weeks after Treasury and the IRS announced guidance was forthcoming, nothing has arrived.
Trulieve’s own balance sheet puts the scale of this issue into perspective. Its most recent financial figures report $696m in uncertain tax position liabilities, the accumulated cost of years under 280E. Until Treasury clarifies both the forward relief and the retroactive treatment of prior overpayments, that figure remains ‘uncertain’.
Regulatory parity is dependent on the aforementioned expansion of rescheduling to adult-use operations. The third, ‘growth’, is perhaps the most underappreciated.
The federal intoxicating hemp ban, taking effect in November 2026, will force demand that has migrated to the unregulated hemp market back into state-licensed cannabis channels.
“That was akin to a puppy dog sale for THC. Try taking that dog back after seven or eight years,” Harrison said. “It’s just not going to happen.”
Ohio dispensaries reported customer count increases of 20-30% after the state’s hemp ban took effect in March 2026, with individual store owners estimating $200,000-$300,000 in additional revenue, early evidence, Harrison argues, of what the federal ban will deliver nationally in November.
“The government made its bets, it said no hemp, we want the regulated state channels, and that’s what we got. It’s a perfect scenario for the regulated market.”
“Think about the normalization of THC over the last ten years,” Harrison said. “The thesis has been spot on. It’s just been bifurcated.” The hemp ban, in his view, is the mechanism that begins to reunify it.
For the eight operators now working through their reverse splits, redomiciles, and shareholder votes, the exchange listing is only half the battle.
It opens the door, but the ‘three amigos’ needed to demonstrate their businesses are investable will determine whether institutional capital walks through it.
The opportunity is massive. With the sector currently trading at mid-single-digit EV/EBITDA multiples despite margins frequently above 25%, this discount could soon start correcting.
However, if these three factors are not yet where they need to be, a NYSE ticker solves nothing.
As for the uplistings, Harrison believes: “That was the first, it’s not going to be the last.”
This is Third-Party content and does not reflect (or not not reflect) the views of Cannabis Confidential or CB1 Capital.
 | A guest post by
|