Cannabis Market Trends: H1 2026 Review and Forecast

US rescheduling a key cannabis market catalyst

The most important US development in 2026 has been the long-awaited rescheduling of medical cannabis to Schedule III from Schedule I, a shift that has already produced tangible effects.

The change has enabled a number of companies to list on the NYSE. Both Trulieve Cannabis (NYSE:TRLV) and Glass House Brands (NYSE:GLAS), which listed in Q2, said that cannabis rescheduling was a key enabler of their moves, with Glass House explicitly calling the uplist impossible before the change.

Policy anticipation has already shown up in performance dispersion. Ahrens, who manages two main cannabis strategies, highlighted a notable divergence between US and Canadian names.

His global strategy fund, the AdvisorShares Pure Cannabis ETF (ARCA:YOLO), which holds US, Canadian and some international cannabis stocks, has outperformed in most time periods. “That's really flip-flopped in the past year. The US cannabis stocks got a big boost back in December, which is quite a bit more than the Canadian stocks,” Ahrens explained. “That's really based on anticipation of all the federal reforms happening in the US."

At the same time, the cannabis sector is watching administrative law judge (ALJ) hearings on rescheduling adult-use cannabis more broadly. “(July 15) is the final day of the ALJ hearings to reschedule adult use overall, and everybody’s expecting positive outcomes on that as well,” the expert noted.

Austin Stevenson, chief revenue officer of ACT LAB, was quick to state that a Schedule III classification does not mean a “looser” world, but a more accountable one, necessitating a sharper focus on consumer safety, product consistency and transparent data-driven compliance to secure long-term public and regulatory trust.

“The companies that benefit most will be the ones already investing in clean data, reliable testing, strong quality systems and transparent compliance,” he said about the change.

Matt Baumgartner, CEO at cannabis-infused beverage company Keef, said in commentary shared with INN that the biggest impact may be the stability rescheduling creates for the cannabis industry.

“Better access to lending and banking, relief from outdated tax burdens and a clearer federal posture would give operators more room to invest in growth, innovation, compliance and responsible expansion," he noted, adding, “A more stable federal framework should also recognize that different products belong in different channels."

Baumgartner proposed a policy that would see milder products on mainstream shelves and high-potency products anchored in specialized dispensaries. He further commented:

“Schedule III does not automatically solve the complexity of a market that has developed state by state, channel by channel and product by product.

"Operators will still need to navigate different rules, different expectations and different consumer access points. Any future framework needs to recognize the role that category has played in bringing new consumers into regulated, tested and responsibly sold products.

“The companies that do this well will not be the ones looking for a short cut. They will be the ones that understand both sides of the market, respect the regulated channel and build for long-term category health instead of short-term advantage.”

In terms of the the long-running SAFER Banking Act, Ahrens believes the politics surrounding the legislation may finally get easier after the rescheduling process is further along in the US.

“My view is that SAFER Banking will get passed much more easily than the past attempts once it is much more of a non-controversial issue, and it’s more of just an administrative issue that needs to get solved,” he said.

“After we have the resolution of the administrative law hearings, we have the rescheduling; I think it'll be a lot easier to kind of put a bow on it, if you will, and have SAFER Banking.”

That sentiment was echoed by Adam Stettner, CEO of FundCanna, albeit with an important caveat.

“While the cannabis industry should welcome the bipartisan reintroduction, no one should confuse introduction with completion,” he wrote in a statement provided to INN.

“However, what feels different for me this time is the broader backdrop,” he added.

“There is real momentum around federal cannabis reform, including the rescheduling process, and Senate Banking Committee Chairman Tim Scott has been more publicly engaged on the cannabis banking problem than we have seen in the past. That matters. But I believe this industry has learned not to celebrate until policy actually changes. We will have to see whether the eighth time is finally the charm.”

Even if federal rescheduling advances as expected, Ahrens said he does not see a nationally uniform cannabis market emerging overnight. Instead, he anticipates federal guidance that still defers heavily to states’ rights.

“You’re going to have individual states that have medical cannabis. You’re going to have individual states that have medical and adult use, and it’s going to be up to individual states whether they want to have that,” he said, adding that rules on licensing and dispensary caps will also remain state-specific. “A lot like the alcohol industry. People think, ‘Oh, alcohol is legal.’ Well, not really legal everywhere and under the same rules. It varies around the country.”

Cannabis market forecast for 2026

Looking ahead to the third quarter, Ahrens has a positive outlook on the US cannabis sector, primarily driven by expectations surrounding the policy calendar. He expects each step — ALJ outcomes, rescheduling, listings on major exchanges and ultimately banking access — to provide “multiple legs up” for the sector.

“It’s going to take a little bit of time to put everything into law, it’s going to be a process. But we’re expecting to hear very positive things," he said in conversation with INN.

“The earnings, the balance sheet, the cashflow, the revenue isn’t nearly as important as what is happening with federal reform ... that’s what these stocks are going to be trading on, and we’re expecting it to be positive.”

Beyond near-term policy headlines, Ahrens sees a more structural improvement in industry economics on the horizon.

First is the end of 280E tax treatment, which prevents operators from deducting ordinary business expenses.

“That’s going away. That’s going to improve bottom lines immensely,” he said.

Second is the likely closure of what he called the “hemp loophole” — billions of dollars of CBD and hemp-derived product sales flowing through a fragmented, lightly regulated channel. “That’s probably at least mostly going away in November. So that’s billions of dollars of revenue that can flow into state-licensed legal cannabis,” Ahrens said.

He believes these shifts could create a fundamentally different 2027 earnings picture: “More of a story for 2027, I expect the actual bottom-line financials to look much, much better for the majority of these companies.”

On positioning, ancillary plays are not where Ahrens sees the real leverage to reform.

“It’s the multi-state operators that actually grow the product, have the dispensaries, have the licenses with the states. Those are really going to be the big beneficiaries here,” he said.

Ahrens also pointed to a subset of companies with a more focused production model and potential upside from eventual interstate and even international commerce, including large-scale growers in California.

“There are a handful of companies that have a similar model, but a little bit of a different model, in the fact that they're a big grower and have the opportunity for interstate commerce and international commerce.”

Investor takeaway

Despite the significant developments afoot, Ahrens noted that anticipation is concentrated.

He described a market split between informed cannabis investors who have “a great deal of optimism” around rescheduling and related federal reforms, and the broader market, which is largely disengaged. For most retail and institutional investors, cannabis is off the radar until still-pending legal milestones are resolved.

For now, sentiment among investors still nursing scars from the last cycle is dominated by a wait-and-see mode.

As Ahrens put it, “Cannabis investors might need some treatment for PTSD for what they’ve been through for the last four or five years.”