Friday felt like one of those days you remember for years if you’re anywhere near the cannabis trade.
Stocks that have been left for dead suddenly woke up and sprinted. Some of the biggest names in the space jumped 20%, 30%, even 40% before lunch. The spark? Reports that the incoming administration is ready to sign an executive order moving marijuana from Schedule I to Schedule III — potentially as soon as Monday.
And while we’ve seen false dawns before, one investor who has lived through every twist of this story says something actually feels different this time.
Why This Move Changes Everything
Let’s be honest — most of us have trained ourselves not to get excited about cannabis headlines anymore. We’ve watched states legalize, watched bills die in Congress, watched valuations get crushed again and again.
But rescheduling isn’t just another headline. It’s the master key that could finally unlock the doors Wall Street has kept firmly closed.
Right now, because marijuana sits on Schedule I — the same category as heroin — banks treat it like radioactive waste. Major exchanges impose extra hurdles. Institutional investors, the big pension funds and endowments, often have internal rules that simply say “no Schedule I exposure.”
Move cannabis to Schedule III and suddenly those roadblocks start crumbling.
“Investors who are in cannabis now are absolutely ahead of institutional capital — and that will be powerful when it finally arrives.”
– Tim Seymour, founder and CIO of Seymour Asset Management
The Valuation Picture Is Almost Too Good to Believe
Here’s the part that still makes me blink twice.
The entire publicly traded cannabis industry — U.S. operators, Canadian LPs, ancillary businesses — trades at roughly 1 times sales and about 6.5 times adjusted EBITDA.
Let that sink in.
One times sales. For a sector that virtually everyone agrees is growing 20-30% a year for the foreseeable future.
Compare that to almost any other high-growth industry and it looks like the bargain of the decade.
- Cloud software? Often 8-15x sales
- Renewable energy? 4-10x sales
- Even consumer staples trade above 2x
Cannabis sits at 1x because the market has priced in permanent regulatory exile. If that exile ends, the re-rating could be violent to the upside.
The “This Time Feels Different” Argument
I’ve heard that phrase before and rolled my eyes. But there are concrete reasons seasoned players are using it now without irony.
First, the industry itself is no longer a bunch of dreamers hoping Congress suddenly discovers morality. Companies have spent years lawyering up, lobbying, and gaming out exactly what rescheduling would mean on day one.
They know which banking relationships flip from impossible to possible overnight. They know which institutional consultants have already drafted the new compliance memos. They’ve run the numbers on 280E tax relief.
Preparation meets opportunity.
“Even the most sophisticated analysts on the Street probably can’t tell you what multiple cannabis should trade at. But what everyone is sure of is that it’s a growth industry.”
The Stocks Everyone Suddenly Remembers They Own
Tilray led the charge Friday — up more than 23% at one point — simply because it’s the name retail traders know best and it’s Nasdaq-listed, so buying it feels normal.
But the real money, when it comes, probably flows toward the U.S. multistate operators that actually ring registers in legal states today.
Think Trulieve dominating Florida, Cresco and Curaleaf with scale across multiple markets, Green Thumb building a retail empire. These aren’t hopes and dreams — they’re cash-flowing businesses trading at fractions of private-market multiples.
And yet, even after Friday’s surge, most of them still sit below the levels they hit last August when the rescheduling rumor first surfaced. The market basically said “we’ll believe it when we see the signature.”
We might see that signature in the next 72 hours.
What Schedule III Actually Means (and What It Doesn’t)
Let’s keep expectations grounded for a second.
Rescheduling is not full federal legalization. You won’t be able to walk into Wells Fargo and open a checking account for your dispensary on Tuesday morning without some paperwork.
But it is a seismic shift.
- Banks can start providing normal services without fearing regulators will shut them down
- Major exchanges can relax extra listing requirements
- Institutional compliance teams can finally check the “yes” box
- 280E tax relief becomes much more likely (a 20-30% earnings swing for many operators)
- Uplisting to NYSE or Nasdaq becomes realistic for the big MSOs
None of that requires an act of Congress. An executive order or HHS recommendation plus DEA rulemaking can make it happen.
The Institutional Dam About to Break
Here’s the part that keeps me up at night — in a good way.
Global institutions have been watching this space for years, doing the diligence, building the models, waiting for the risk department to give the green light.
When that light flips, the money doesn’t trickle in. It floods.
We’re talking billions, not millions. And at today’s valuations, that kind of inflow rewrites the entire sector cap table almost overnight.
In my experience, markets rarely stay rational when a structural barrier that everyone assumed was permanent suddenly disappears. The move tends to be fast, furious, and overshoots on the way up — just like it overshot on the way down.
Risks? Of Course There Are Risks
I’d be doing you a disservice if I painted this as a guaranteed moonshot.
Politics remain messy. The DEA still has to go through formal rulemaking, which takes time and can be challenged. Some banks will move slowly even with clearer rules.
And valuations can always get cheaper before they get expensive — we’ve seen that movie before.
But the risk/reward skew right now feels about as lopsided as I’ve ever seen it in this space.
The Bottom Line
Cannabis has been the ultimate “tomorrow” story for a decade. Tomorrow the laws change. Tomorrow the banks open up. Tomorrow the institutions show up.
For the first time in a very long while, tomorrow might actually arrive next week.
If you’ve been waiting for the signal that the adults are finally taking this industry seriously, this could be it.
And when the grown-up money starts buying something that still trades at one times sales in a 25% growth market?
Well, let’s just say the last people who got in front of that wave early tend to have pretty good stories to tell.
Disclosure: The author holds positions in multiple cannabis-related companies and ETFs mentioned in spirit (though not by name) in this piece. This is not individualized investment advice — do your own research.
