2 Medical Marijuana Stocks to Buy Now

The DOJ’s move to reclassify cannabis from Schedule I to Schedule III should materially benefit Trulieve and Green Thumb by removing Section 280E tax constraints for medical-marijuana businesses. Trulieve reported 2025 revenue of $1.2 billion and record adjusted EBITDA of $427 million, while Green Thumb posted $1.2 billion of revenue, $0.48 EPS, and authorized an additional $100 million buyback, lifting its total repurchase authorization to $150 million. The article argues Green Thumb is the stronger operator due to positive GAAP net income and capital returns, while Trulieve offers higher upside if Florida’s market opens.

Analysis

The cleanest read is that the market is still underpricing the second-order earnings step-up from 280E relief, but not uniformly. The real beneficiaries are the operators with high retail mix and clean balance sheets: they get an immediate margin reset and a larger pool of internal capital for store openings, M&A, and brand spend. That makes the move more powerful than a simple tax-rate story because it compounds into share gains in markets where capex has been constrained for years.

Green Thumb screens better as the lower-volatility way to express the theme: it already has credibility with public-market investors, and buybacks should mechanically lift EPS if the stock stays depressed. The hidden edge is not just capital returns, but the ability to defend shelf space and brand share while weaker peers are forced to choose between liquidity and growth. Trulieve is more of a convexity trade: if Florida adult-use ever reopens, its embedded distribution footprint becomes a call option on a much larger addressable market.

The consensus may be too linear on timing. The biggest catalyst is not the rescheduling headline itself, but whether the June hearing broadens the benefit beyond medical use; if not, the sector could re-rate down again as investors realize the tax benefit is real but the TAM expansion is still years away. That creates a narrow window where the best risk/reward is to own the strongest balance-sheet operators and fade the weaker, more levered names that will struggle to convert tax savings into durable equity value.

A further contrarian point: this is likely to widen dispersion inside cannabis rather than lift the whole group. Improved after-tax cash flow will likely accelerate consolidation, with stronger operators acquiring distressed licenses and footprints at lower multiples over the next 6-18 months. That makes the trade less about “buy the sector” and more about owning the eventual consolidators before the balance-sheet gap becomes obvious.

Key Decisions for Investors

• Long GTBIF vs. short a basket of weaker MSOs over the next 1-3 months; the cleaner balance sheet and buyback authorization should drive relative multiple expansion as capital markets reward survivability over leverage.
• Initiate a smaller, higher-conviction long TCNNF position as a call option on Florida adult-use over 6-24 months; keep sizing modest because the upside is policy-dependent and the stock may retrace if the June catalyst disappoints.
• Use call spreads in GTBIF rather than outright equity for the next 2-4 months; the setup offers upside from margin expansion and buybacks while limiting downside if the sector fades after the rescheduling enthusiasm cools.
• Avoid longs in marginally profitable or cash-burning cannabis names into the June hearing; the post-tax windfall will likely widen operating gaps and increase bankruptcy/forced-sale risk over the next 6-12 months.
• If the group rallies sharply into the hearing, consider selling upside in the broad cannabis ETF or highest-beta names and keeping exposure only in GTBIF; the market is likely to over-discount full federal normalization.