Cannabis stocks crater as Florida fails to garner needed votes for adult use

Cannabis stocks took a major hit on Wednesday following the failure of a Florida ballot measure to legalize adult-use recreational marijuana.

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Trulieve Cannabis Corp., the largest medical cannabis operator in Florida and a key supporter of the campaign, saw its shares plummet by 44%, marking the company’s steepest one-day decline on record.

Trulieve had invested nearly $145 million into the campaign, which ultimately fell short of the 60% supermajority required to amend Florida’s constitution. The measure faced opposition from the Florida Republican Party and Governor Ron DeSantis, who argued legalization could harm the state's quality of life.

Trulieve’s decline also heavily impacted the AdvisorShares Pure US Cannabis ETF (MSOS), which fell 25% as Trulieve holds a significant weight in the fund. Shares of other U.S. cannabis companies, including Green Thumb Industries, Curaleaf Holdings, and Cresco Labs, experienced double-digit drops as well. Canadian cannabis companies were similarly affected, with Canopy Growth, Tilray, and Cronos Group all seeing sharp declines.

The cannabis industry is also navigating broader political shifts. With former President Donald Trump’s victory in the recent election and Republican control of the Senate, some analysts view potential cannabis reforms as more favorable. Trump has previously supported rescheduling cannabis and easing banking restrictions to allow companies to operate beyond cash-only transactions, which currently pose safety risks. However, Trump’s administration may prioritize other issues, and the impact on cannabis reform remains uncertain.

Currently, 24 states permit recreational cannabis use, and 39 allow medical cannabis, positioning the Senate with representatives from both regulatory stances. While rescheduling cannabis as a Schedule III drug could mark a major policy shift, some analysts, including Aaron Grey from Alliance Global Partners, anticipate that moderate reform, such as the SAFER Banking Act, is more likely in the near future. This measure would provide cannabis businesses access to traditional banking services, offering greater operational stability.