Can we expect further growth in the global cannabis market? Find out!
The Investing News Network spoke with analysts, market watchers and insiders about which trends will impact this sector in 2025.
“A significant shift in cannabis investing over the last several years and even more pronounced this year and expectedly moving forward has been the demand for historical performance. Dreamy pitches and ambitious projections no longer cut it. Investors are looking at track records and proven expertise, especially in saturated or price-pressured markets”
— the Panther Group
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Cannabis is becoming increasingly mainstream in North America.
However, federal legalization remains elusive, creating questions for investors watching the space.
Meanwhile, in Canada, companies are looking to the government for stronger support.
Here the Investing News Network examines the key trends that shaped North America’s cannabis industry in 2024.
Heading into 2025, the outlook for US cannabis reform remains uncertain, particularly when it comes to the timing and likelihood of rescheduling. The process is now not expected to be finalized until late 2025.
The changes include simplifying licensing, production and security clearance requirements, increasing production limits for “micro-cultivators” and making it easier for licensees to submit required reports to Health Canada.
While cannabis rescheduling stalled in the US, state markets saw more movement.
Kentucky’s cannabis market also saw developments in 2024 with the legalization of medical cannabis and the establishment of a regulatory framework for cultivation and distribution.
2024 tested the resilience of cannabis companies and investors.
Canopy Growth’s international business delivered an especially strong performance in Q2, with a 12 percent year-on-year increase in revenue growth, driven by markets in Poland and Germany. In particular, its Storz & Bickel vaporizer brand saw a significant boost of 32 percent thanks to regulatory changes in Germany and increased US sales.
Strategic partnerships with EU-based cultivators helped the company establish a foothold in Europe.
The US cannabis industry is navigating a complex landscape of opportunities and challenges. While market expansion and increased mainstream acceptance drive growth, regulatory hurdles and financial pressures persist.
As the industry matures, companies that can adapt to changing regulations, demonstrate profitability and meet evolving consumer demands are likely to emerge as leaders in this dynamic market.
While the Canadian cannabis market has progressed further, work remains if it is to fully flourish.
Overall, the future of the cannabis industry will depend on ongoing legal reforms, technological advancements and consumer trends, making it a sector to watch closely in the coming years.
Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.
2025 could be a year of transformation for the cannabis industry.
With rescheduling potentially on the horizon in the US, a new era of opportunity awaits. However, with a new president set to take the helm in January, uncertainty and key challenges remain for market participants.
Read on to learn more about trends that could shape the cannabis market in what may be a critical year.
The US cannabis market could see a major shift in 2025 if rescheduling finally happens.
If successful, the move to reschedule cannabis has the potential to significantly benefit cannabis businesses by removing barriers to essential services like banking and patent protection. However, the path forward for rescheduling remains uncertain, particularly after Donald Trump’s win in the US election this past November.
“On the other hand, new leadership could prioritize rescheduling or even push for full legalization to align with social equity and justice reform efforts. Either way, the FDA and DEA are being directed to reevaluate cannabis’ current status, which will set the stage for the inevitable regulatory overhaul,” she also told the news outlet.
David Vaillencourt, founder and CEO of the GMP Collective, chairman of S3 Collective and vice chair of ASTM International Committee D37 on Cannabis Standards, also expressed his thoughts, noting, “Trying to forecast what a Trump administration might do is like picking stocks based on a fortune cookie: amusing but unreliable.”
He added, “That said, there is reason for cautious optimism. Trump’s pick for Secretary of Health and Human Services – assuming he is confirmed by the Senate — Robert F. Kennedy Jr. supports natural medicine and criticizes the FDA’s rigidness. Additionally, we saw Trump endorse Florida’s Amendment 3 to legalize adult-use cannabis. Whether this signals a genuine shift or a strategic move to outmaneuver (Ron) DeSantis is anyone’s guess.”
If rescheduling is successful, it would also remove the trigger for the Internal Revenue Service tax code 280E, which prevents cannabis business owners from deducting regular business expenses.
Some of the changes proposed in June include simplifying licensing, production and security clearance requirements, increasing production limits for “micro-cultivators” and making it easier for licensees to submit required reports to Health Canada. Comments submitted by the public are currently under review.
This upward trajectory will be fueled by legalization efforts, new market entrants and product innovation.
Market consolidation is set to continue in 2025, and mergers and acquisitions will create opportunities for both established players and emerging companies to expand market share and access new resources.
This potential shift could impact the regulation of CBD and other hemp-derived cannabinoids, creating both opportunities and challenges for hemp businesses as they adapt to changes.
As the cannabis industry continues to mature, these and other companies will be battling for dominance in a rapidly evolving market.
Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.
2024 saw the cannabis industry grappling with persistent challenges, mirroring those of the preceding two years. The absence of meaningful regulatory reform in both the US and Canada continues to stifle market growth
There was some positive momentum in the US as new markets entered the industry and the US Drug Enforcement Administration moved to reschedule cannabis from Schedule I to Schedule III; however, subsequent roadblocks suggest the process could take longer than industry hopefuls originally anticipated.
Cannabis companies in the sector continue to move forward and develop their offerings, and with potential catalysts ahead some investors are interested in getting involved. Looking at the key players is often a good place to get started, so this list of US and Canadian cannabis stocks covers the companies with the largest presence in two major cannabis ETFs.
Cannabis is federally illegal in the US, but state market openings have allowed some operators to thrive. Typically these firms set up vertically integrated businesses with a focus on branded products, retail networks and licenses.
While these companies have adapted to regulatory challenges, they have much to gain from country-level reform in the US, and are eager to see more welcoming federal laws that will allow their businesses to develop further.
ETF weight: 36.3 percent
Market cap: US$1.89 billion
Share price: US$7.81
Green Thumb Industries is a multi-state operator (MSO) with headquarters in Chicago, Illinois.
The company is involved in the entire process of the industry, from cultivating and producing cannabis products to selling them in its own retail stores, of which there are many across the United States. Green Thumb Industries owns a portfolio of well-known cannabis brands like Rythm, Beboe, Dogwalkers, Incredibles and Doctor Solomon’s.
ETF weight: 18.63 percent
Market cap: US$967 million
Share price: US$4.81
Trulieve is another major player in the cannabis industry, with a strong focus on medical cannabis. The company offers a diverse selection of cannabis products including flower, pre-rolls, concentrates, edibles, topicals and more.
ETF weight: 15.05 percent
Market cap: US$1.1 billion
Share price: US$1.50
ETF weight: 8.24 percent
Market cap: US$1.51 billion
Share price: US$1.24
Verano Holdings is a vertically integrated cannabis company. It delivers high-quality products out of its 150 Zen Leaf and MÜV retail locations, which are spread across 14 states.
ETF weight: 6.5 percent
Market cap: US$398.64 million
Share price: US$0.87
Cresco Labs is a vertically integrated multi-state cannabis operator in the United States. A leading US cannabis company, it is known for its strong brands like Cresco, High Supply and Good News.
Cresco Labs controls its supply chain from cultivation to retail, offering a wide range of products. While it has its own stores, it focuses heavily on wholesale, getting its products into dispensaries across the country.
In 2018, Canada became the first G7 nation to legalize adult-use cannabis and create its own streamlined program regulated by both federal and provincial powers. Since then, companies working in the country have faced ups and downs in dealing with tight marketing rules, high tax rates and ongoing competition with the unregulated market.
While HMMJ does not invest in US-based multi-state operators, it does have exposure to the US market through Canadian companies that have interests in the US cannabis industry. Overall, HMMJ is designed to give investors broad exposure to the cannabis industry, with a particular focus on North American companies.
This ETF had a year-to-date loss of 0.32 percent as of December 23 and a price point of C$9.29.
ETF weight: 15.74 percent
Market cap: US$2.09 billion
Share price: US$70.45
Innovative Industrial Properties is a real estate investment trust that provides specialized real estate opportunities for cannabis companies in 19 states. Its properties mostly consist of processing plants, greenhouses and warehouses, with retail spaces making up a small percentage of its portfolio.
ETF weight: 15.05 percent
Market cap: US$7.51 billion
Share price: US$124.25
Jazz Pharmaceuticals is a global biopharmaceutical company focused on developing and commercializing medicines for people with serious diseases, often with limited or no other options. They have a diverse portfolio of products in areas like sleep disorders, cancer and epilepsy.
ETF weight: 8.03 percent
Market cap: US$768.41 million
Share price: US$2.01
Cronos Group is the Canada-based company behind the Spinach, Peace Naturals and Lord Jones cannabis brands. In Canada, Cronos’ Spinach brand is in the top three for retail sales in the flower, edible and vape categories.
ETF weight: 4.99 percent
Market cap: US$491.17 million
Share price: US$1.85
SNDL, formerly known as Sundial Growers, is the largest private-sector liquor and cannabis retailer on the Canadian market. They cultivate and sell cannabis products under various brands including Top Leaf, Sundial Cannabis, Palmetto and more. They focus on premium indoor cultivation and have a strong presence in the Canadian market.
ETF weight: 2.68 percent
Market cap: US$366.89 million
Share price: US$2.87
Canopy Growth is a company that’s grown alongside Canada’s cannabis industry. Founded in 2013, it has become one of the largest producers of cannabis in the world, fostering brand deals with celebrities like Martha Stewart and Snoop Dogg.
The company maintains a strong focus on medical cannabis, with a dedicated division called Spectrum Therapeutics, which offers a variety of products and resources for patients seeking cannabis-based treatments.
Each investor will have to think and act for themselves to manage their own risk exposure, but it’s no secret that cannabis stocks have taken a beating for some time now. While financial experts point to the long-term upside of US operators as more state markets expand, the stock market has not been kind to these names lately.
Cannabis investments are extremely young in the grand scheme of the investment universe. There is an exciting and refreshing element to these stocks, but the market has always been characterized by volatility and unpredictability.
While wild, spontaneous swings in the open market have become less common, cannabis stocks are often moved — both positively and negatively — by big pieces of market news or legalization updates.
Investors may choose to get exposure to the cannabis market as a way to participate in the development of a new drug market with consumer packaged goods capabilities. Some participants are bullish on the industry’s long-term outlook and expect more welcoming laws in the US and across the world to provide upward momentum.
Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.
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