Pot Stocks Now in Better Position Than Ever Before

“Be greedy when others are fearful and be fearful when others are greedy.”

– Warren Buffett 

* The cannabis industry has never been closer to rescheduling and resolving custodian and uplisting issues

* Perhaps the most positive and unnoticed variable has been the industry’s rescheduling of its debt (on excellent rate and duration terms) a few months ago 

* Yesterday’s procedural court ruling (of a stay) caused a near panic in cannabis equities yesterday – nonetheless, a rescheduling is not likely to be materially impacted   

* The confluence of the above (and positive) factors are creating an excellent entry point to invest in the space

* The retail investor cannabis base has been decimated by a series of regulatory disappointments over the last 5+ years  – as without the prospects of  institutional support  a sustained  rally has been problematic – however, for the reasons mentioned below (rescehduling, et al)  I see institutional investors beginning to enter and support cannabis stocks over the balance of the year 

I covered the mechanics of the stay decision on Tuesday and Wednesday:

* Spatafora on Cannabis Doug’s Daily Diary — Monday, September 21, 2026 | TheStreet Pro

* Claude on Cannabis Doug’s Daily Diary — Wednesday, September 30, 2026 | TheStreet Pro

* Cannabis News  Doug’s Daily Diary — Tuesday, September 29, 2026 | TheStreet Pro

* Cannabis Thoughts Doug’s Daily Diary — Monday, September 21, 2026 | TheStreet ProHere is an excellent legal review of the stay from yesterday afternoon’s The Dales Report:

https://twitter.com/i/broadcasts/1MJgNbvMbjlGL

Here is an abridged version of Shadd and Anthony’s podcast:

⚖️ "The hearing is not stayed. There is not a stay of the proceedings or of the rescheduling. What the ALJ did was just to pause the proceedings, which were unfolding on a timeline, and he did that on the opponent's motion to include in the record that GAO report. And the current… pic.twitter.com/dAX0MN4ewZ

— TDR (@TheDalesReport) September 30, 2026

And here is more from this morning:

⚖️ The Rescheduling Recommendation Was Almost Here. Then ALJ Julius Hit Pause Until 10/13

For six weeks the only thing left in the DEA's marijuana rescheduling hearing was the recommendation itself. Testimony wrapped in July, final briefs landed in August, and every trader in… pic.twitter.com/EBnsQBwv5e

— TDR (@TheDalesReport) September 30, 2026

I view yesterday’s news and market disruption as strictly procedural.

The severe share price reaction was a not an unexpected Pavlovian reaction — likely based on a history of news and share price disappointments (discussed below) and partially a function of the lack of liquidity in individual cannabis equities.

So, while rescheduling might be delayed somewhat, a unique opportunity to accumulate cannabis equities is emerging, which is exactly what I did yesterday.

The Past Five Years Have Been Brutal for Cannabis Investors

After two false starts about 5-7 years ago  in which I lost money, I had positioned  my portfolio long cannabis stocks (on more, seven or eight, occasions) — buying on bad news and routinely selling on good news. This (short term and trading-like)  positioning approach has yielded seven or eight consecutive wins.

The reason I consistently sold on strength (despite the vitriol on Twitter and criticism elsewhere) and not have elected to hold over the last five years or so is that I felt the retail investor base was not strong enough to sustain a rally in the cannabis sector.  

All those sell decisions proved correct.

This was especially true about a year ago when the President issued Executive Order 14370 directing the Attorney General to expedite cannabis rescheduling on December 18,2025. (See: Federal Register: Increasing Medical Marijuana and Cannabidiol Research.) That day the stocks rallied (we immediately sold) and were hit hard, with most cannabis investors and traders stunned. Many still feel the pain, so skepticism and a Pavlovian reaction to the stay announcement was not surprising. (See: Federal Marijuana Rescheduling: Process and Impact | Moritz College of Law.)

This pattern of very brief strength in the cannabis space on good news  – has left the retail investor base in cannabis with sizeable losses, little confidence and recency bias – so the durability of any advance (regardless of news) has become suspect and fragile.

The Present Setup For Cannabis Investors Has Improved Materially From the Past

But we think the industry conditions have improved markedly and the regulatory process of rescheduling of cannabis (despite yesterday’s sharp decline in cannabis shares) will be intact.

It remains my view that the decision yesterday was procedural and rescheduling (though slightly delayed) is my baseline expectation.

I am optimistic on the cannabis space because:

* I am extremely confident that rescheduling of both medical and adult use (recreational) will pass in the next few months.

* I am confident that uplistings will soon follow.

* More relaxed custodian rules allowing for institutional purchases of the group.

* The recent debt refinancings have eliminated the frightening debt maturity cliff that some feared.

* Industry fundamentals (volumes and pricing) have stabilized.

* Expectations are very low.

* Massive absolute and relative underperformance over the last five years has created a long runway for appreciation.

* Upside reward is probably more than 5x downside risk.

Bottom Line

The announcement of the stay has created an exceptional entry point in cannabis as the industry and shareholders are better positioned than at any time in history.

Positions: Long MSOS common VL calls S TRLV S GTBIF S TSNDF VS CURLF VS VRNOF VS GLAS S

• Category: Daily Diary