The First Real Contraction 📉

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Total cannabis sales fell to $28.6 billion in 2025, down from approximately $30.1 billion in 2024, according to First Citizens Bank's 2026 Report.

Then the Q4 earnings confirmed it.

Green Thumb Industries CEO Ben Kovler acknowledged "ongoing price compression" and warned that Q1 2026 revenue will be "sequentially down mid-single digits due to continued pricing pressure and seasonality." 

The phrase "ongoing price compression" appears in every filing. The structural ceiling that operators have been talking around for two years is no longer theoretical.

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The Split

Let’s start with who's winning.

Trulieve stands apart. Full-year revenue of $1.18 billion, 60% gross margins, record adjusted EBITDA of $427 million, and record free cash flow of $229 million. 

The company retired $368 million in senior notes before their 2026 maturity and closed a $140 million private placement of 2030 notes. Year-end debt of $232 million at a 9.4% blended rate, well below the 11-12%+ rates at peers.

Vireo Growth reported full-year revenue of $268.7 million, up more than 250% from $100 million in 2024. The company ended Q4 with $122.5 million in cash and has pending acquisitions of Eaze, PharmaCann retail assets in Colorado, and an MOU for ScottsMiracle-Gro's Hawthorne subsidiary.

Verano refinanced $195 million at 9.5% with Needham Bank and Chicago Atlantic Financial Services. A mainstream regional bank providing large-scale cannabis lending at sub-10%. 

CEO George Archos called it "a watershed moment."

Now who's losing.

The Cannabist Company (formerly Columbia Care) is in serial forbearance, having elected not to make December 2025 interest payments. The company sold its Virginia assets to Millstreet Credit Fund for $130 million in a loan-to-own transaction. 

That was the first time an institutional credit fund outbid an MSO at a cannabis asset auction. 

Discussions continue about additional asset sales.

The national wholesale cannabis index dropped to $1,002 per pound. Missouri sits 1.6% above its all-time low. The MSOS ETF fell 5.7% for the week and is down roughly 18% year-to-date.

Hanging over everything: the $1.6 billion collective 280E tax bill. 

MJBizDaily itemized the exposure - Trulieve carries $630 million in uncertain tax positions. Curaleaf $531.5 million. Verano $378 million. Cresco Labs $171.5 million. 

More than 40 operators have challenged 280E in Tax Court and all have lost.

The split is no longer about who grows fastest. It's about clean books, manageable debt, and the free cash flow to survive until policy catches up.

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Since 2000, residential real estate outperformed the S&P 500 by 70% in total returns. It’s the only asset that pays you to own it, grows while you sleep, and shields your gains from the IRS. 

That’s why you need mogul. It’s a real estate platform that lets you invest in institutional-grade rental properties. You get monthly rental income, capital appreciation and tax benefits without a down payment or 3 a.m. tenant calls. In fact, over 20,000 investors have joined. 

Here’s Why:

• Tax Benefits

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TLDR: You can invest in high quality real estate for a fraction of the cost. Why wait?

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Past performance isn't predictive; illustrative only. Investing risks principal; no securities offer. See important Disclaimers

Don't Build on Rescheduling

The Congressional Research Service just downgraded its rescheduling language from "likely" to "may." 

That's the authoritative nonpartisan congressional research body signaling increased uncertainty about the timeline.

The market is repricing accordingly. 

Polymarket odds for rescheduling by June 30 halved from 30% to 15% in roughly two weeks. By December 31st: 43%. The DOJ told the Supreme Court on March 3 that "the government has not made final decisions" on rescheduling.

And even if it happens, Blank Rome's legal analysis published this week is the clearest reality check available - BSA and FinCEN compliance obligations will not vanish with rescheduling. 

Enhanced due diligence, suspicious activity reporting, and monitoring requirements persist. Banks already serving cannabis retain a competitive advantage because the compliance investment is too expensive for new entrants.

The game-changer is 280E relief. Once cannabis moves to Schedule III, operators can deduct ordinary business expenses. Rent, salaries, marketing. That frees capital and improves lending viability. 

But rescheduling alone doesn't open the banking floodgates. Only 11% of financial institution professionals said rescheduling makes them more likely to bank cannabis in a recent Abrigo survey. 

22% said it makes them less likely.

Fewer than 998 institutions currently file cannabis-related SARs out of roughly 9,000 total U.S. banks and credit unions.

One piece of legislation is trying to change that. CLIMB Act bill prohibits any federal agency from taking adverse action against a person "solely because the person provides business assistance to a cannabis-related legitimate business." 

Protected services explicitly include lending, insurance, payments, accounting, advertising, real estate, and securities underwriting. It would also allow cannabis businesses to list on the NYSE and Nasdaq.

US Cannabis Roundtable CEO Saphira Galoob: "Right now, Canadian cannabis companies can ring the bell at U.S. stock markets and access American capital markets while domestic cannabis businesses are largely locked out."

The CLIMB Act is now the only active cannabis financial access bill in Congress. The SAFER Banking Act has not been refiled in the 119th Congress.

But this bill didn't advance in its prior form after being filed in 2022. It exists. It hasn't moved. Don't build your capital structure around it.

The Hemp Reckoning

While cannabis operators navigate margin compression and stalled rescheduling, the hemp industry faces something more immediate: state-by-state elimination.

Ohio's Senate Bill 56 took effect March 20 after a referendum effort failed to collect enough signatures. The law bans intoxicating hemp products, including THC and CBD beverages, outside licensed dispensaries. An estimated 6,000 Ohio businesses are affected.

Wholesaler Mark Fashian, who worked with more than 500 stores: "Friday morning, I'd be considered a felon."

A lawsuit was filed in Franklin County to block enforcement. 

Ohio's 2025 marijuana sales totaled $836 million. The hemp THC products that competed with that market are now illegal.

Texas follows on March 31. The Department of State Health Services finalized regulations banning smokeable hemp products by measuring total THC instead of Delta-9 alone. 

THCA flower, pre-rolled joints, and similar products that make up more than 50% of some stores' inventory become noncompliant overnight.

Licensing fees jumped from $258 to $10,000 for manufacturers and $155 to $5,000 for retailers. Hometown Hero CEO Lukas Gilkey: "They did a ban with their own regulatory scheme." Texas Cannabis Policy Center director Heather Fazio estimated the restrictions will "hand 50% of the legal market to illicit operators."

The Texas hemp industry estimates existing sales exceed $5 billion.

And then the contradiction that captures the entire federal posture. 

CMS is launching a Medicare CBD pilot on April 1st that allows 3 milligrams of THC per serving for qualifying patients. The November 2025 hemp law signed by the same president caps products at 0.4 milligrams per container. 

One federal agency is preparing to reimburse products that another federal law effectively bans.

Banks cannot comply with both simultaneously.

The $28.3 billion hemp industry is being dismantled state by state before the November 2026 federal deadline even arrives.

What This Means For You

The cannabis industry is past peak growth and into a phase where operational discipline determines survival. 

The first revenue decline is not a blip. Price compression, duplicated state-by-state supply chains, and a structural ceiling on the domestic market are permanent features until federal policy changes.

The operators who built clean balance sheets are pulling away. 

The question has never been demand. It's always been access to the financial infrastructure that every other legal industry takes for granted.

Trulieve didn't generate $229 million in free cash flow by waiting for rescheduling. Build the business that survives regardless of what Washington does. 

The operators who've done that are the ones getting capital today.