The cannabis stock correction is over, this analyst says

U.S. cannabis stocks appear to have completed their post-Executive Order pullback, with technical indicators suggesting the sector remains in an overall uptrend despite recent volatility, according to a Jan. 5 industry update from Beacon Securities analyst Russell Stanley.

As previously outlined by Beacon, U.S. President Donald Trump’s decision to direct the Department of Justice to move cannabis from Schedule I to Schedule III initially triggered a classic “sell-on-the-news” reaction. While the AdvisorShares Pure U.S. Cannabis ETF has fallen about 28% since the Executive Order was signed, it remains up roughly 60% from its November lows and 27%from its Dec. 11 close, when market speculation about the policy shift first intensified.

Stanley said the technical damage from the pullback has been limited. While prior 52-week highs failed to hold as support across most names, the next key support level, the 21-day exponential moving average, has largely held. Curaleaf (Curaleaf Holdings Stock Quote, Chart, News, Analysts, Financials TSXV:CURA)  was the main exception, briefly breaking below that level before finding support along its upward trendline.

“Technically speaking, it looks as though the ‘sell-on-the-news’ correction is complete,” Stanley said, adding that the ETF and Beacon’s coverage universe remain in established uptrends.

Relative performance across large U.S. multi-state operators has diverged. Trulieve Cannabis (Trulieve Cannabis Stock Quote, Chart, News, Analysts, Financials CSE:TRUL) continues to outperform the sector benchmark on a currency-adjusted basis, with Cresco Labs (Cresco Labs Stock Quote, Chart, News, Analysts, Financials, CSE:CL) also showing sustained relative strength since early December.

Verano Holdings (Verano Stock Quote, Chart, News, Analysts, Financials CBOE:VRNO) is beginning to improve, while Green Thumb Industries (Green Thumb Industries Stock Quote, Chart, News, Analysts, Financials CSE:GTII) has tracked the benchmark more closely. Curaleaf, Village Farms (Village Farms International Stock Quote, Chart, News, Analysts, Financials NASDAQ:VFF) and High Tide (High Tide Stock Quote, Chart, News, Analysts, Financials TSXV:HITI) have lagged more recently.

Stanley said that the broader sector setup remains constructive, with investor attention now shifting away from headline risk and toward fundamentals, balance sheets and execution. While near-term volatility is likely to persist, Beacon sees the technical backdrop as supportive heading into 2026 following the sharp rally off November lows.

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