Investors in cannabis stocks are hoping for a turnaround in 2025 after enduring significant losses throughout 2024. With only a few trading days remaining in the year, the AdvisorShares Pure US Cannabis ETF (MSOS) has dropped 48% year-to-date.
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Among major U.S. and Canadian cannabis operators, Curaleaf Holdings (CURLF) fell approximately 62%, Verano Holdings (VRNOF) dropped 73%, Trulieve (TCNNF) slipped 7.5%, Green Thumb Industries (GTBIF) declined 31%, and Cresco Labs (CRLBF) lost 37% of its value. TerrAscend (TSNDF) also declined 62%, while Ascend Wellness (AAWH) saw a 64% drop. Meanwhile, Canopy Growth (CGC) fell 45%, and Tilray Brands (TLRY) lost 37%. An exception was Canada’s OrganiGram (OGI), which gained over 20% this year. Faced with mounting pressures, Weedmaps (MAPS) is planning to go private.
These losses occurred as the cannabis industry grappled with challenges at both state and federal levels in the U.S. The incoming GOP-controlled Congress has shown little interest in prioritizing cannabis reform. Additionally, the U.S. Drug Enforcement Administration’s review of cannabis reclassification to a less dangerous category may not be finalized until 2026 or later, according to legal experts.
Despite President-elect Donald Trump expressing support for Florida’s cannabis legalization measure, the proposal failed to secure the 60% vote required for approval. Similar initiatives were rejected in South Dakota and North Dakota, although Nebraska approved a medical marijuana program.
The industry’s focus on state-by-state expansion faces hurdles, as no major states are expected to launch new programs soon. Pennsylvania remains stalled despite Governor Josh Shapiro’s support for adult-use legalization, which requires legislative approval. Florida’s efforts to legalize retail marijuana sales were defeated, and states such as Texas and Oklahoma show little inclination toward legalization. Hawaii and New Hampshire are considering adult-use legalization bills, but outcomes remain uncertain.
Currently, 38 U.S. states have legalized medical marijuana, and 24 allow adult-use programs. With Republicans gaining control of Congress and the White House in 2025, further reform efforts face significant challenges. Charles Gormally, a cannabis law specialist at Brach Eichler LLP, noted that most Republicans in Congress are not supportive of cannabis liberalization. This stance reduces the likelihood of passing the SAFER Banking Act, which would grant legal cannabis businesses access to banking services. While the House has approved the measure seven times in the past decade, it has never reached a full Senate vote.
On the positive side, Trump’s broader deregulation agenda may favor state-level cannabis decisions, potentially boosting the industry. Trump’s selection of Robert F. Kennedy Jr. as Secretary of Health and Human Services could also aid efforts to reschedule or remove cannabis from the Controlled Substances Act, according to industry observers.
Despite regulatory uncertainty, cannabis businesses continue to expand in existing markets. New York, for instance, is projected to reach $1 billion in sales as authorities crack down on illegal dispensaries and issue new retail licenses.
Lauren Fontein, co-founder of The Artist Tree, anticipates a contraction in the number of retailers in California in 2025 due to declining sales, competition from illicit operators, and high taxes. She expects more companies to enter receivership, enabling the legal market to stabilize from an oversupply of retail outlets. Fontein also hopes that communities hesitant about cannabis will begin licensing stores as public acceptance grows.
Mike Khemmoro, chief operating officer at Mango Cannabis, predicts modest growth driven by incremental developments like consumption lounges in Michigan and New Mexico. However, he emphasized the importance of mergers and acquisitions to achieve scale and sustainability in the market.
“The gold rush is over,” Khemmoro stated. “Companies unable to scale or maintain profitability will face acquisition or closure.”
While challenges persist, cannabis companies are focused on navigating regulatory uncertainties and building profitability through market consolidation and operational efficiencies.
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