Cannabis Stocks Surge After Investors Once Again Believe the Government Loves Them

By Boof du Jour | Markets & Delusions Desk

The cannabis sector rallied this week after Washington whispered the word “rescheduling” again, an event that reliably sends weed stocks sprinting into traffic like a neglected dog hearing keys jingle.

Within hours, analysts were back on television explaining, earnestly, solemnly, with charts, that this time is different. Capital flooded in. Group chats lit up. Retail traders dusted off brokerage apps they swore they’d deleted in 2022. Somewhere, a junior analyst updated a PowerPoint titled “Cannabis: The Turnaround Story” for the seventh consecutive year.

And just like that, cannabis stocks surged.

THE CATALYST (ALLEGEDLY)

The rally was triggered by renewed optimism that the U.S. federal government might finally reschedule cannabis-again-sometime-maybe-eventually-pending reviews, hearings, committees, and vibes.

This was enough for markets to react as if:

• 280E was already dead

• banking was solved

• interstate commerce was imminent

• and Congress had suddenly discovered weed in the same way a suburban dad discovers hot sauce

None of that happened. But the idea that it could happen was more than sufficient.

As one analyst put it on air:

“Rescheduling represents a meaningful inflection point for the industry.”

This sentence has been uttered every year since Obama’s second term.

THE STOCKS EVERYONE ‘LOVES’ (AGAIN)

According to analyst coverage and financial media enthusiasm, several familiar names led the charge, companies that have survived through a mix of dilution, debt, vibes, and sheer refusal to die.

Their charts did the thing. Their volumes spiked. Their press teams immediately began drafting quotes.

One executive was overheard saying: “This validates our long-term strategy.”

The strategy, for the record, being:

• wait

• don’t collapse

• issue more shares

repeat

THE BUSINESS MODELS (UNDER A MICROSCOPE)

Let’s be clear: none of these rallies were driven by fundamentals.

Revenue did not magically increase. 

Margins did not improve overnight. 

Retail pricing did not stabilize. 

Real estate leases did not get cheaper. 

States did not stop taxing the shit out of everything.

What did happen is that investors temporarily remembered cannabis exists and collectively decided that regulatory change would save everyone from their own spreadsheets.

This is the same industry that:

• pays dispensary rent like it’s Manhattan in 2007

• sells flower at prices that assume no one owns a calculator

• and builds brands that exist solely to be acquired by someone else who is also broke

  
  

But sure. This time the math works.

THE BANKING FANTASY

Every rally includes the same sub-plot: banking is coming.

Suddenly, people talk like cannabis companies will be welcomed into JPMorgan branches with open arms and artisanal pens.

No one explains how this happens.

No one explains who underwrites it.

No one explains why banks that hate risk would rush into an industry defined by volatility, regulation roulette, and cash.

They just say:

“Institutional capital is waiting.”

Institutional capital has been “waiting” for ten years and has yet to RSVP yes.

THE ANALYST ECOSYSTEM

This is where the real comedy lives.

Analysts are forced-professionally, tragically-to treat cannabis stocks like normal equities.

They use words like:

• “EBITDA normalization”

• “path to profitability”

• “operational leverage”

All while discussing companies that:

• operate in dozens of disconnected regulatory micro-states

• cannot advertise normally

• cannot bank normally

• cannot transport product normally

• and cannot tell the truth on earnings calls without crying

Yet the models persist.

One report optimistically projected profitability “within 24–36 months.” This is analyst code for “after I’ve changed jobs.”

THE RETAIL INVESTOR EXPERIENCE

Retail investors, bless them, reacted exactly as expected.

Screenshots of green charts flooded social media. Someone posted “WE’RE BACK.” Someone else posted rocket emojis and then deleted them.

These are the same investors who:

• bought at the top last time

• held through dilution

• watched reverse splits happen

• and now tell themselves this rally is a reward for patience

It isn’t. It’s a loop.

THE HISTORICAL CONTEXT (ALWAYS IGNORED)

Every cannabis rally follows the same arc:

1. Regulatory rumor

2. Analyst excitement

3. Retail euphoria

4. Reality

5. Silence

Six months from now, this surge will be referred to as:

• “a temporary disconnect”

• “a speculative move”

• or “premature optimism”

Everyone will pretend they weren’t bullish. No one will clip the old segments.

BOOF BOTTOM LINE

Cannabis stocks didn’t rally because the government loves them. They rallied because investors want the government to love them.

This industry has become a masterclass in financial Stockholm Syndrome-where markets fall in love with the same captor every time it promises to change.

Rescheduling might happen. It might even help.

But if your entire thesis depends on Washington suddenly being competent, consistent, and generous- you’re not investing, you are manifesting.