Week In Review: Cannabis & Psychedelics Industry Highlights

LOS ANGELES – Wrapping up the first half of September 2025, it’s worth noting that the Cannabis & Psychedelics industries continue proving their resilience amid political uncertainty and turbulent market dynamics. From stock rallies signaling undervaluation to regulatory shifts aimed at stabilizing operations, this Week in Review highlights a sector balancing regulatory and financial pressures with growth opportunities. International expansions and promising research in Psychedelics add layers of optimism, while calls for federal policy reforms underscore persistent challenges. Let’s take a closer look at the key developments, providing a reverse perspective with regard to their broader implications that lie ahead.

Market Performance & Financial Strategies

Cannabis stocks have rallied significantly this year, with the MSOS ETF up 57% year-to-date through late August, outpacing the S&P 500’s 8% gain. However, a Viridian Capital Advisors report emphasizes that U.S. multi-state operators (MSOs) remain undervalued, trading at 7x projected 2025 EBITDA, below peers in tobacco, pharmaceuticals, and healthcare. Tier 1 MSOs project 27% EBITDA margins but face flat revenue growth through 2026 due to market saturation and competition. Potential rescheduling [?] to Schedule III could boost multiples by easing taxes under Section 280E, but broader reforms like banking access are needed for true maturity.

In capital raising, the industry saw $1.54 billion year-to-date, down 2.4% from last year, with debt comprising 90.2% of funds. The cultivation and retail sector bucked the trend, raising $1.12 billion [a 82.8% increase], highlighting investor focus on core operations amid broader stability. Meanwhile, AYR Wellness secured a $50 million bridge loan at 14% interest to bolster restructuring, involving asset sales in six states via credit bids, addressing $904 million in debt. Echoing this, Schwazze is nearing a similar debt overhaul with $65 million in new capital, selecting top assets for a deleveraged entity while dropping unprofitable ones, amid industry-wide $6 billion in 2026 maturities.

Viridian’s analysis of 12 MSOs shows 2026 debt as manageable for top-tier firms like Trulieve and Curaleaf, post-refinancings, though weaker players like Jushi face higher leverage risks. Curaleaf’s inclusion in the S&P/TSX Composite Index marks a milestone as the first [!] U.S.-based Cannabis company in the index, potentially drawing institutional capital. These moves illustrate a sector shifting toward debt-heavy financing and restructurings to navigate capital constraints.

Regulatory & Policy Developments

New York’s Office of Cannabis Management (OCM) delayed a hearing on a disputed 500-foot school buffer rule, seeking settlement with over 15 affected dispensaries, highlighting regulatory unpredictability in the state’s rollout. The OCM also switched to Metrc for inventory tracking in early 2026, replacing BioTrack, to enhance traceability amid a market projected at $1.5 billion annually.

Federally, NORML urged support for the reintroduced MORE Act (H.R. 5068), which could deschedule Cannabis, expunge convictions, and impose a 5% tax for community reinvestment, amid 87% public support for legalization. However, the Trump administration moved to cancel pending Cannabis and hemp rules, including research expansions and hemp lab waivers, creating uncertainty around rescheduling. A separate analysis debunked myths about rescheduling to Schedule III, noting it wouldn’t grant states full autonomy or ease research without Congressional action, though it could allow tax deductions.

In California, lawmakers backed a five-year pause on the recent excise tax hike from 15% to 19%, aiming to combat the illicit market capturing 60% of sales and stem license losses. Pennsylvania’s Hemp Beverage Alliance pushed for regulations on hemp-derived THC drinks, citing revenue models from Minnesota [$11.6 million] and Tennessee [$11 million], to boost safety and taxes.

Sales, Revenue & Consumer Trends

Delaware’s recreational market launched strong with $7.4 million in first-month sales, led by flower at 55%, projecting $215 million annually and $40 million in taxes, though a 15% rate risks cross-border competition. Maryland collected $18.4 million in Q2 taxes, allocating funds to community reinvestment, amid stabilization after a 9% to 12% rate increase. Canada’s legal industry contributed $16 billion to GDP in 2024, supporting 227,000 jobs, outpacing forestry and breweries, but calls for excise tax reforms to unlock exports.

Delta-8 THC usage peaks in non-recreational states at 10.9%, nearly double legal states, serving as a substitute but raising safety concerns in unregulated markets. Medical Cannabis gains traction among seniors, with Germany seeing a 640% prescription spike post-legalization and U.S. usage rising to 7% among those 65+ for pain and sleep.

Business Expansions & Operational Insights

The Cannabist Company expanded in Ohio with a Norwalk dispensary, its 6th in the state, tapping rural markets in a $700 million annual sector. Real estate trends favor vertical integration, outdoor cultivation, and turnkey facilities, with listings like New Jersey’s outdoor farm and Minnesota’s retail bundles highlighting cost efficiencies. Retailers are advised to optimize owned channels like CRM and SEO over paid ads in a “Scrappy Retailer’s Playbook,” combating 80% effective tax rates and competition from hemp brands.

Psychedelics Advancements

A MindMed study showed a single 100-microgram LSD dose reduced anxiety symptoms in 65% of GAD patients for 12 weeks, advancing toward FDA trials without psychotherapy. Former Senator Kyrsten Sinema advocated for ibogaine research after personal treatment, backing Arizona’s $5 million allocation for TBI and PTSD studies, amid Texas’s $50 million commitment.

International Highlights

Morocco approved 67 Cannabis-based products (26 cosmetics, 41 supplements) and exported 50kg of resin to Australia, with cultivation up to 4,400 hectares. Europe’s medical Cannabis market is set for €1.4 billion in 2025, led by Germany’s €670 million and UK’s €300 million, with exports tripling in Portugal and Denmark.

HCN Insight

We observed that the past two weeks’ developments revealed a sector facing political pendency and a clear transition, adeptly addressing undervaluation and debt pressures through targeted restructurings and an increased focus on cultivation. Strong revenue signals from emerging markets like Delaware and Maryland, along with international progress, bode well for economic expansion, though persistent issues like illicit competition and elevated taxation in California necessitate swift regulatory refinements. Advancements in Psychedelics signal therapeutic potentials, yet federal volatilities [from halted rules to clarified rescheduling realities] introduce key uncertainties. Overall, while resilience is evident, sustained progress relies on comprehensive reforms to unlock banking, research, and market stability, positioning the Cannabis and Psychedelic industries for long-term benchmarks rather than temporary bargains.