Cannabis stocks are having a moment few operators saw coming this early in the year. The AdvisorShares Pure US Cannabis ETF (MSOS) climbed to its highest levels of 2026, with investors positioning ahead of a June 29 federal hearing that could reshape how marijuana is classified under U.S. law. As of May 31, MSOS 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% return over the same stretch.
Trulieve Cannabis, the fund's largest holding at roughly 30% of assets, began trading on the NYSE under ticker TRLV this week, a listing CEO Kim Rivers called a "historic milestone." The move required Trulieve to separate its medical cannabis operations from its adult-use business, a structural shift that cleared the path for a senior exchange listing. For multi-state operators still running dual-track compliance systems - tracking medical and adult-use inventory separately through platforms similar to New York seed-to-sale dispensary software - the Trulieve model offers a preview of what uplisting-ready corporate structuring might actually require in practice. New York seed-to-sale dispensary software
Here's the catch: a listing like this doesn't happen because a company simply wants it. It happens because federal tax treatment changed enough to make Wall Street's compliance departments comfortable. Acting Attorney General Todd Blanche's April decision to move state-licensed medical marijuana into Schedule III eliminated the harshest bite of Section 280E for medical operators, allowing them to deduct ordinary business expenses like payroll, rent and interest for the first time. That's not a minor bookkeeping tweak - 280E has quietly strangled cannabis retailer margins for a decade, forcing operators to pay federal tax on gross profit rather than net income. Removing it, even partially, changes the math on everything from wholesale pricing to store expansion.
What the DEA Hearing Actually Decides
The upcoming administrative hearing, running through no later than July 15, will examine whether broader marijuana products - including adult-use cannabis, not just medical - should also move to Schedule III. That distinction matters enormously for retail economics. Medical-only rescheduling helps a narrower slice of operators; a broader ruling would extend tax relief and banking access to adult-use dispensaries, which represent the bulk of retail transaction volume in most mature markets. Roth Capital called the rescheduling order "extremely favorable" for the sector, pointing to benefits across taxation, capital access and future uplistings. Fair enough - but a hearing outcome is not a foregone conclusion, and operators betting balance sheets on a favorable ruling are taking on real regulatory risk.
Capital Access Is the Real Story for Operators
Cresco Labs' newly secured $50 million revolving credit facility from Needham Bank illustrates what's actually changing on the ground. CEO Charlie Bachtell described it as a "non-dilutive tool" for acquisitions and a step toward a future senior-exchange listing. That kind of financing was nearly impossible to secure from traditional lenders before Schedule III momentum began building, since federal illegality made banks wary of underwriting cannabis debt at scale. Tilray Brands, though not part of MSOS, has signaled similar ambitions, saying it may deploy proceeds from a recent at-the-market offering toward acquisitions. In practice, though, easier capital access cuts both ways: it accelerates consolidation, but it also raises the stakes for operators who overextend before regulatory clarity actually arrives.
Reading Past the Headline Winner
Trulieve has become the sector's public face, but it isn't necessarily the best-positioned stock by upside metrics. According to Koyfin data cited in market commentary, Verano (VRNO) carries the highest projected upside among MSOS holdings, followed by Jushi Holdings (JUSHF) and Cresco Labs (CRLBF). Among the larger positions, Green Thumb Industries (GTBIF) stands out with upside well above both Trulieve and Curaleaf (CURLF), the world's largest cannabis company by revenue. Retail sentiment trackers like Stocktwits show "extremely bullish" positioning across several of these tickers, alongside heavy message volume - a reminder that retail enthusiasm and business fundamentals don't always move at the same pace.
What This Means for Retail and Compliance Teams
None of this changes what happens at the store level tomorrow morning. Dispensary operators still need compliant packaging, current COAs on every batch, and seed-to-sale tracking that satisfies state auditors regardless of what happens on Wall Street. Schedule III reform, if it broadens beyond medical products, would ease tax burdens and improve banking relationships - but age verification, lab testing requirements, and local zoning restrictions remain state-level matters untouched by federal rescheduling. Operators chasing the capital-markets narrative would do well to remember that compliance infrastructure, not stock price, is what keeps a license intact.
