Why Cannabis Stocks Jumped By Double Digits And Why Analysts Say 'Don't Drink The Kool-Aid In One Gulp'

Author’s note: this article has been updated to include more context and commentary from analysts.

After months of sluggish performance, cannabis stocks finally showed signs of life. This week, the U.S. cannabis sector surged double digits, fueled by new buzz around federal reform and the reemergence of an unlikely political player: Donald Trump.

The rally was led by the AdvisorShares Pure U.S. Cannabis ETF (NYSE:MSOS), which jumped roughly 12.5% since Monday. At the time of publication, it had reclaimed its 50-day moving average for the first time since the 2024 election. But whether this move has real legs or is just another hype-fueled head fake depends on what happens next in Washington.

The Trump Factor

According to The Marijuana Herald, President Trump is privately urging members of Congress to pass cannabis banking reform before the 2026 midterms. Two senior Senate staffers told the outlet that Trump began contacting lawmakers directly this week, encouraging them to prioritize the SAFER Banking Act or similar legislation.

This follows earlier reporting—later confirmed by CNN—that Trump's team tried to include SAFE banking language in a December 2024 funding resolution. While he hasn't made public comments since retaking office, Trump's campaign previously pledged to support "safe banking for state-authorized companies" and a move to reschedule marijuana for medical research.

No new banking bill has been introduced this session, but members of the Congressional Cannabis Caucus say it remains a top priority.

Legislative Winds Picking Up—But Not Moving Markets (Yet)

The STATES 2.0 Act, a bill that would formally defer cannabis policy to the states and end IRS 280E tax penalties, was reintroduced on April 17. But with no Senate companion and little immediate momentum, the bill didn't appear to influence stock prices. At best, it adds background noise to the growing chorus of reform chatter—but investors are still waiting for action, not aspiration.

A Technical Pop And A Cautious Crowd

"It was a Green Day on Wall Street," wrote Todd Harrison, founder of CB1 Capital, in his Cannabis Confidential newsletter of April 24. "Canna stocks were higher too as talk turned to promises made becoming promises kept."

Still, MSOS remains down 24% year-to-date, a reminder that breakouts in cannabis can fade as fast as they arrive. Harrison echoed that skepticism, noting that "no news is bad news" in a status quo world of "uneven regulations and onerous taxes."

He also referenced a recent White House visit from Weldon Angelos, a longtime advocate for cannabis clemency and reform, suggesting behind-the-scenes efforts are ramping up: "Suffice to say that if I was already of the view that promises made will be promises kept—I was—I feel better today than I did yesterday, despite still not having a line-of-sight on the timing."

Even so, he cautioned that many U.S. operators are still "racing against the clock" as tangible solutions to well-known issues—like tax burdens, banking access, custody restrictions and debt refinancing—remain elusive.

"Tangible problems require tangible solutions, which are apparently on the way… but financial activity—restructurings, M&A, equity movement—has largely ground to a halt."

Analysts Say Don't Chase It Just Yet

Viridian Capital Advisors struck a similar tone. In a client note, the firm acknowledged the optimism but warned against over-committing to rumors.

"Until Trump publicly states his support for SAFE banking and makes it more concrete than ‘before the midterms,' investors are right not to overcommit."

Viridian's analysis of U.S. MSOs with market caps between $50 million and $200 million shows the group still trades at a median EV/2025 EBITDA multiple of 4.57x, or 6.14x, when adjusted for lease and tax obligations. That signals potential value, but only if the policy tailwinds materialize.

"Recent news is causing some long-lost optimism," Viridian added. "Just don't drink all of the Kool-Aid in one gulp. Maintain dry powder to fill in positions on pullbacks."

Cannabis Stocks On The Move

Here’s how key cannabis stocks have performed this week so far:

• Green Thumb Industries Inc (OTC:GTBIF): up almost 11%
• Trulieve Cannabis Corp (OTC:TCNNF): up almost 29%
• Curaleaf Holdings Inc (OTC:CURLF): up 6.2%
• Cronos Group Inc (NASDAQ:CRON): up 5.4%
• Tilray Brands Inc (NASDAQ:TLRY): up 11%
• Canopy Growth Corp (NASDAQ:CGC): up 34.3%
• SNDL Inc (NASDAQ:SNDL): up 7.5%
• Glass House Brands Inc (OTC:GLASF): up 14.5%

The Bottom Line

Cannabis stocks rallied. Sentiment improved. Technicals woke up. But in this sector, headlines come cheap and real reform still costs political capital.

If SAFE banking re-emerges and Trump goes public with his support, this week's bounce could turn into something more meaningful. But until then, this may be just another puff of smoke in the long saga of cannabis policy and price action.

Photo: Shuttertock