Cannabis Stocks Soared—Than Sank. Here's What Investors Need to Know.

The immediate market reaction is less about the policy change itself and more about the gap between headline optionality and monetizable cash flow. Cannabis equities remain heavily owned by momentum accounts and retail sleeves, so any incremental policy signal can trigger a fast squeeze, but the second-order effect is that schedule changes mostly improve the probability distribution of future financing access rather than near-term earnings. That matters because these names are still diluted-capital stories: lower perceived regulatory risk can compress cost of capital, yet if operating losses persist the benefit leaks to creditors and new equity holders before it accrues to common shareholders.

The more interesting winner-set may be upstream rather than branded operators. If prescription pathways expand, the value chain shifts toward firms with compliant cultivation, testing, distribution, and pharma-adjacent relationships, while illicit-market share erosion becomes more likely only over a multi-quarter horizon. In contrast, the pure-play MSOs and Canada-heavy names still face a slow conversion problem: even if multiple expansion arrives first, actual EBITDA inflection likely lags by 2-4 quarters as pricing, state-level competition, and working-capital intensity keep pressure on margins.

The consensus appears to be underpricing how much of this move is a positioning event versus a fundamental rerating. Short-dated upside can persist if broader rescheduling rhetoric continues into the June hearing window, but the event risk cuts both ways: any legal delay, narrowing of scope, or confirmation that federal legalization is still off the table should deflate the squeeze quickly. The setup favors tactical trading, not directional conviction, until there is visibility on FDA pathway clarity and actual banking/tax or coverage implications.