US weed companies got leaner in 2024. The only thing investors care about is cannabis reform.

Major American cannabis operators had a decent 2024, managing to keep revenues flat despite dealing with plummeting weed prices.

Record-high harvests in states like Michigan, California, and Oregon have led to a glut of cannabis and therefore lower prices. That means that while major US cannabis operators were able to increase volumes and enter new markets, sales were largely flat, if not shrinking, and companies have had to focus on cutting costs to turn better profits.

Companies like Curaleaf and Trulieve, for example, both reported improved profit margins even as sales stayed flat. “They have the advantage of scale and because of that, they were able to perform better than we would have expected given the data from the markets, which showed a lot of price compression,” said Frederico Gomes, an analyst at ATB Capital Markets.

Smaller players haven’t fared as well: PharmaCann defaulted on December and January rents, according to its landlord IIP. (IIP, which also reported flat revenue in 2024, said a deal was reached.)

US weed companies are typically traded over the counter or on smaller exchanges. Investors can also get exposure to them through ETFs. Canadian weed companies — such as Tilray, Canopy Growth, and SNDL Inc. — can list on the Nasdaq and the New York Stock Exchange so long as they don’t sell weed in the US.

Green Thumb Industries — the largest plant-touching cannabis company by market cap — didn’t see as drastic improvement in its profit margins, but it was already way ahead of its peers. You wouldn’t know it by looking at its stock price, but it’s the only one that posted a net profit in 2024, and has consistently turned an annual profit since 2020.

Its CEO, Benjamin Kovler, is super chill and humble about it. “We are flushed with cash; we are spitting out cash and everybody is scared,” he told analysts on February 26.

Dan Ahrens, an asset manager who manages the AdvisorShares Pure US Cannabis ETF, said investors are less reactive to how profitable US cannabis companies are now and more interested in how close they are to getting federal cannabis reform.

Even as the prices of the underlying stocks have fallen, bringing the price of the ETF down with it, there are low outflows. Ahrens said investors want to have exposure to the US cannabis market in the event that federal cannabis reform causes these firms to balloon in value. 

“It doesn’t have a whole lot to do with fundamentals,” Ahrens said. “It has everything to do with the status of federal reform.”

Well, is cannabis reform happening?

The Department of Justice announced in late April that it would recommend reclassifying marijuana from a Schedule I drug (like heroin and LSD) to a Schedule III drug (like Tylenol and testosterone). As that rule has been chugging along the federal rulemaking process, it was revealed that officials at the Drug Enforcement Administration, the DOJ subagency handling reclassification, were in cahoots with anti-rescheduling groups.

On the campaign trail, President Trump said he supports loosening federal cannabis restrictions and threw his support behind a ballot measure in Florida that would have legalized recreational cannabis. (The measure failed; while over 55% of the state voted in favor, Florida requires a 60% majority to ratify new amendments.)

Most American cannabis CEOs have projected confidence that Trump will pass federal cannabis reform but are operating under the assumption that it’s not going to happen. 

“We’re not planning our business around it, but we do certainly believe that he will follow through on his commitments,” Curaleaf CEO Boris Jordan told analysts on March 3. 

George Archos, CEO of Verano Holdings, told analysts on February 27 that he’s “cautiously optimistic” Trump will support rescheduling and banking reforms, but “we never run the business based on legislative assumptions and remain confident in our ability to grow the company in the current environment.”

Trulieve, which has a large presence in Florida’s medical cannabis market, took a large hit to its stock after the state failed to pass an amendment that would’ve made recreational marijuana legal. “We believe the support of the majority of Floridians, including President Trump, sends a very strong signal the voters are ready for common-sense cannabis reform,” Kim Rivers, CEO of Trulieve, told analysts on February 27.

Green Thumb CEO Kovler was notably less optimistic (or perhaps more candid) than his peers.

He told analysts on February 26 that the DEA “is corrupt and misguided and out to lunch.” He pointed to the fact that Health and Human Services Secretary Robert F. Kennedy Jr. has recently taken a less friendly tone on cannabis policy and Trump has appointed cannabis-hostile officials to the Department of Justice.

“It’s not a popular opinion, it’s controversial, but it guides how we allocate dollars. It helps us understand who the consumer is and allows us to win,” Kovler said. “So being on an island away from our peers is welcome over here. No problem.”