Cannabis Stocks in Focus as 280E Relief Lands and MSOs Post Profitable Q1 2026 Results

The catalyst for the sector's renewed momentum is the Department of Justice and DEA Final Order signed by Acting Attorney General Todd Blanche on April 22, 2026 and effective April 28 upon Federal Register publication. The order moves marijuana contained in FDA approved drug products and marijuana subject to a qualifying state issued medical license from Schedule I to Schedule III of the Controlled Substances Act, implementing President Trump's December 18, 2025 Executive Order on Increasing Medical Marijuana and Cannabidiol Research.

280E Relief Reshapes the Economics

The most consequential change for cannabis investors is the removal of Internal Revenue Code Section 280E as a barrier to standard business deductions for state licensed medical marijuana operators. The Treasury Department and IRS announced on April 23 that forthcoming guidance will include a transition rule under which the rescheduling applies for the full taxable year that includes the effective date of the Final Order. For calendar year taxpayers, that effectively means 280E relief applies from January 1, 2026 forward for qualifying medical operations.

Pre rescheduling, cannabis operators faced effective federal tax rates that legal and tax analysts have placed in the 70% to 75% range because 280E disallowed ordinary business deductions like wages, rent, marketing and depreciation. For state licensed medical operators, those deductions are now available, with the potential to push effective rates closer to the standard corporate 21% rate. The critical caveat for the broader industry is that adult use and recreational marijuana remain Schedule I, leaving 280E fully in effect for those operations and creating immediate cost allocation complexity for dual license multi state operators.

MSOs Deliver Profitable Q1 2026

Trulieve Cannabis (CSE: TRUL) (OTCQX: TCNNF) reported Q1 2026 revenue of $287 million with a 59% gross margin, GAAP net income of $2 million, adjusted EBITDA of $100 million at a 35% margin, and free cash flow of $42 million. The largest US MSO by dispensary count, Trulieve operates 240 retail dispensaries and over four million square feet of cultivation and processing capacity, and has filed DEA registration applications for 206 of its state licensed medical retail locations. CEO Kim Rivers credited the Trump administration's reclassification action as enabling new growth opportunities. Cash at quarter end was $353 million.

Curaleaf Holdings (TSX: CURA) (OTCQX: CURLF) reported Q1 2026 net revenue of $324.2 million, up 6% year over year, with international revenue up 35% to $47 million. The company posted GAAP net income of $70.1 million or $0.09 per share and adjusted EBITDA of $63.4 million at a 19.6% margin. Curaleaf also completed the buyout of the remaining 45% equity interest in its German subsidiary Four20 Pharma, taking ownership to 100%, and closed on $500 million in non dilutive senior secured notes due February 2029 to refinance prior debt. Chairman and CEO Boris Jordan called the rescheduling "historic" and said macro headwinds are turning into tailwinds.

Green Thumb Industries (CSE: GTII) (OTCQX: GTBIF) reported Q1 2026 revenue of $300.2 million, up 7.4% year over year, GAAP net income of $15.4 million or $0.07 per share, and normalized EBITDA of $93.5 million at a 31.2% margin. The company generated $76 million in cash flow from operations and repurchased approximately 6.0 million subordinate voting shares for $33.3 million during the quarter, leaving $344.5 million in cash at quarter end. Founder and CEO Ben Kovler described it as a strong start to 2026.

Canadian LPs Stay Volatile

On the Canadian side, large licensed producers including Tilray Brands (NASDAQ: TLRY), Canopy Growth and Organigram Global remain among the highest dollar volume cannabis names according to MarketBeat's screener. Tilray traded near $5.40 on Wednesday with a 52 week range of $3.51 to $23.20, reflecting the volatility that has characterized Canadian LPs through 2026 as the US rescheduling narrative played out. Analysts note that the immediate 280E relief does not directly benefit Canadian producers without US plant touching operations, leaving exposure to the US opportunity largely a question of future legislative or regulatory steps.

June 29 Hearing Is the Next Catalyst

The DEA has scheduled an expedited administrative hearing beginning June 29, 2026 to consider whether marijuana as a whole, including adult use, should be moved to Schedule III. Interested parties had to submit written notice of participation by May 28, 2026, with the DEA set to notify selected participants on June 22. If the broader rescheduling is completed through that process, the Section 280E tax barrier would also fall for recreational operations, with a final rule potentially published as soon as late 2026, though litigation could extend the timeline.

For investors, the cannabis setup keeps operator quality, balance sheet strength and exposure to state licensed medical markets in focus. Multi state operators with strong cash generation, disciplined capital allocation and meaningful medical revenue mix are best positioned to capture the immediate 280E benefit, while ancillary names in real estate, equipment, packaging and software remain exposed to broader sector sentiment around the June hearing.