Can the STATES 2.0 Act resuscitate cannabis stocks?

A bipartisan group in the U.S. House of Representatives has reintroduced the STATES 2.0 Act, a cannabis reform bill that would exempt state-legal marijuana markets from federal interference and eliminate the 280E tax provision that prevents cannabis companies from claiming standard business deductions.

The legislation, formally titled the Strengthening the Tenth Amendment Through Entrusting States (STATES) 2.0 Act, was introduced by Reps. Dave Joyce (R-OH), Dina Titus (D-NV), and Max Miller (R-OH).

If approved by both chambers and signed by President Donald Trump, the bill would amend the Controlled Substances Act to end the federal criminalization of cannabis activities in states that have legalized it and permit interstate commerce. It would also shift industry oversight to the Alcohol and Tobacco Tax and Trade Bureau and the Food and Drug Administration, creating a potential federal framework for regulated cannabis markets.

Joyce also introduced a separate bill, the PREPARE Act, co-sponsored by House Minority Leader Hakeem Jeffries (D-NY), to prepare the federal government for broader legalization.

Public opinion appears to support the STATES 2.0 Act’s objectives. A survey by Fabrizio, Lee & Associates showed 72% of Republicans support allowing states to set their own cannabis laws, with overall support at 66%.

Beacon Securities analysts Doug Cooper and Russel Stanley, in a research update issued April 21, that the reintroduction of the STATES 2.0 Act helped drive cannabis stocks higher to end the week, with the AdvisorShares Pure U.S. Cannabis ETF gaining 15 percent.

“A survey conducted by Fabrizio, Lee & Associates, showed that Republicans now support cannabis reform by a 53-37% margin, with overall support at 66-25%. Moreover, 72% of Republicans support allowing states to set their own policies v. 68% overall. 67% of Republicans support Rescheduling v. 70% overall,” the analysts noted.

Verano Holdings (Verano Holdings Stock Quote, Chart, News, Analysts, Financials NEO:VRNO), rated “Buy” with a price target of CAD$4.25 per share, led the rally with a 32% gain after appointing Richard Tarapchak as chief financial officer and opening its 81st dispensary in Florida. Beacon’s analysts said Verano Holdings could do approximately $260-million in adjusted EBITDA on revenue of $855-million in fiscal 2025. Those numbers are expected to increase to $267-million in adjusted EBITDA on revenue of approximately $950-million in fiscal 2026.

Curaleaf (Curaleaf Stock Quote, Chart, News, Analysts, Financials TSXV:CURA), also rated “Buy” with a price target of CAD$2.50 per share, expanded its footprint with a new hemp-focused retail location in downtown West Palm Beach and increased its number of Florida dispensaries to 66. Beacon said Curaleaf could generate around $306-million in adjusted EBITDA on revenue of $1.99-billion in fiscal 2025. These figures are expected to improve to $338-million in adjusted EBITDA on revenue of approximately $2.18-billion in fiscal 2026.

Avicanna (Avicanna Stock Quote, Chart, News, Analysts, Financials T:AVCN), which Beacon did not rate, reported a 52% increase in annual sales to $25.5-million, along with stronger gross margins and a reduced EBITDA loss. Avicanna reported $25.5-million in revenue for fiscal 2024 and an adjusted EBITDA loss of $1.4-million, but no projections for 2025 or 2026 were provided.

Grown Rogue (Grown Rogue Stock Quote, Chart, News, Analysts, Financials C:GRIN), also not rated, posted preliminary first-quarter revenue of $1.8-million from its New Jersey operations, with gross margins between 55% and 60%. The company also announced the early conversion of $3.3-million in debentures, saving $700,000 in interest payments. Grown Rogue posted preliminary Q1 2025 revenue of $1.8-million from New Jersey operations with gross margins of 55% to 60%, but the Beacon report didn’t include full-year EBITDA or revenue projections for 2025 or 2026.