Money is flowing into cannabis equities at a pace the sector hasn't seen in years. The AdvisorShares Pure US Cannabis ETF (MSOS) touched its highest levels of 2026 this week, with investors positioning ahead of a Drug Enforcement Administration hearing later this month that could reshape how the federal government treats marijuana. As of May 31, MSOS posted a 103.7% one-year net asset value return, dwarfing the North American Marijuana Index's 36.9% gain and the S&P 500's 29.8% return over the same stretch.
What's driving the rally is a mix of regulatory anticipation and operational proof points. Multi-state operators have spent years building compliant infrastructure - seed-to-sale tracking, METRC integration, point-of-sale systems built for cash-heavy retail - largely without access to the capital markets tools that ordinary businesses take for granted. That's starting to change. In fact, as operators expand into new medical and adult-use markets, many are re-evaluating their back-end technology stacks entirely; platforms offering a cannabis seed to sale erp arizona operators can plug into for compliance reporting and inventory reconciliation are becoming part of the broader infrastructure conversation as multi-state operators scale their footprints ahead of potential uplistings. cannabis seed to sale erp arizona
Trulieve Cannabis, MSOS' largest holding at roughly 30% of assets, began trading on the NYSE this week under the ticker TRLV - a milestone the company achieved partly by separating its medical cannabis operations from its adult-use business, a structural move that made it eligible for a senior exchange listing. CEO Kim Rivers pointed to the Trump administration's Schedule III reclassification of medical marijuana as a key factor that opened the door. Alliance Global, which rates the stock a "Buy," flagged Trulieve's concentration in medical-only states and its exposure to expanding markets like Texas and Georgia as a distinct advantage.
Why the DEA Hearing Carries Real Weight
The June 29 administrative hearing will determine whether broader marijuana products - not just state-licensed medical cannabis - should move to Schedule III. Proceedings are expected to wrap by mid-July. This matters far beyond stock charts. Rescheduling would ease the burden of Section 280E, the tax code provision that currently bars cannabis companies from deducting ordinary business expenses like payroll, rent and interest because the plant remains a Schedule I substance. Acting Attorney General Todd Blanche's April move to reclassify state-licensed medical marijuana already eliminated some of that tax exposure for operators in that category. Trump's formal nomination of Blanche to serve as permanent attorney general has only added to investor confidence that the process will continue.
Capital Access Is the Real Story Beneath the Rally
For operators, the bigger implication isn't the stock price - it's balance-sheet flexibility. AdvisorShares has noted that rescheduling could strengthen earnings, free cash flow and access to institutional capital and banking services across the industry. Roth Capital called the rescheduling order "extremely favorable," citing benefits for taxation, capital access and future uplistings. Cresco Labs put that theory into practice this week, securing a $50 million revolving credit facility from Needham Bank; CEO Charlie Bachtell described it as a non-dilutive tool to fund acquisitions while positioning the company for U.S. capital markets access and a potential senior exchange listing. Tilray Brands, though not an MSOS holding, has signaled it may deploy proceeds from a recent at-the-market program toward acquisitions tied to reform.
Where the Upside Actually Sits
Trulieve gets the headlines, but it isn't where analysts see the biggest gap between price and price target. Verano carries roughly 195% upside, Jushi Holdings sits near 183%, and Cresco Labs is close behind at 99%, according to Koyfin data. Among the ETF's largest positions, Green Thumb Industries stands out with about 70% upside - notably higher than both Trulieve and Curaleaf, the world's largest cannabis company by revenue. Retail sentiment on Stocktwits reflects the enthusiasm: MSOS, Trulieve and Green Thumb all registered "extremely bullish" readings on heavy message volume.
- MSOS managed $1.13 billion in assets as of June 5
- Trulieve's NYSE listing followed a corporate separation of medical and adult-use operations
- The DEA hearing on broader rescheduling runs from June 29 through mid-July
- Schedule III reclassification would ease 280E tax restrictions on ordinary business deductions
None of this changes the underlying retail realities operators face daily - lab testing requirements, compliant packaging, inventory shrinkage controls and age-verification protocols remain non-negotiable regardless of what happens in Washington. But a shift in scheduling status would give operators room to compete on more standard financial terms, which is the piece long-term investors and multi-state operators alike are watching closest.
