July 14, 2026
U.S Cannabis Market – Q2 2026 Update
The first six months of 2026 witnessed several watershed moments for the cannabis industry. The Department of Justice completed the rescheduling of medical cannabis products, and hearings took place to initiate the rescheduling of adult-use products. In an industry-first, two US cannabis operators were listed on the New York Stock Exchange.
In a period in which we’ve witnessed renewed industry optimism and consolidation, Chicago Atlantic continues to originate attractive risk-reward profile, low-leverage loans to cannabis operators in a variety of markets.
RESCHEDULING: FROM ANNOUNCEMENT TO EXECUTION
In December 2025, President Trump issued an executive order directing the Attorney General to complete the rescheduling of cannabis from Schedule I to Schedule III as expeditiously as the law allows. In April 2026, the Department of Justice acted on that order, immediately placing state-licensed medical cannabis in Schedule III and initiating an expedited hearing on rescheduling the remainder of the market.
As we draft this letter in July 2026, hearings in Washington, D.C. will determine the fate of the full rescheduling of state-regulated cannabis products. Industry participants expect full rescheduling to be completed by the end of the year. Rescheduling is tremendously important for the industry: it reduces the tax burden of every state-licensed operator, enables the listing of US operators on US equity exchanges such as NASDAQ and NYSE, and we believe it is an important step in the institutionalization of the industry.
HEMP: THE CHANNEL IS CLOSING
Federal restrictions rendering most intoxicating hemp THC products unlawful take effect November 12, 2026, and the legislative windows to delay or reverse them are closing; the 2026 Farm Bill cleared the House in April with the ban intact. Intoxicating hemp products were an unregulated market that competed with Chicago Atlantic’s core market – we expect that the ban of these products will support our borrowers. As that channel closes, its demand will migrate back to licensed dispensaries, where we expect incremental revenue to land on costs already paid and convert at a high margin, strengthening the credit profiles of the operators we finance.
THE FIRST LISTINGS: ACCESS BEFORE CAPITAL
This quarter produced the first NYSE listings of US cannabis operators: Trulieve Cannabis Corp (NYSE: TRLV) on June 10 and Glass House Brands Inc (NYSE: Glas) on June 30, each qualifying by separating its medical operations to fit the Schedule III pathway. Others are preparing to follow. The listing on major US exchanges opens the potential for greater institutional equity ownership and increasing equity valuations for cannabis operators in the public markets, which may translate to higher valuations of private operators as well.
STATE EXPANSION: THE MAP WIDENS
The licensed map keeps widening. Virginia agreed this quarter to a retail market of up to 350 licenses, with sales starting in 2027. With nearly nine million residents and no Southern peer of comparable scale, it is one of the largest adult-use opportunities on the horizon.
Georgia expanded its medical program in May to allow vaporization and flower and to lift its THC cap, and Rhode Island is issuing roughly two dozen new retail licenses. Each new market pulls demand out of the illicit channel and into regulated, taxed sales.
OUR POSITIONING
We are experiencing a flywheel of improving fundamentals. Regulatory reform pulls more demand into licensed channels. That demand improves operator fundamentals. Stronger fundamentals and market access lift equity values and balance sheets, and enable healthier operators to expand and take share. This cycle benefits Chicago Atlantic as one of the most established lenders in the market.
Until new institutional capital arrives, financing compliant operators falls to a small group of specialized lenders. We have been among them since 2019, and few match our scale or tenure. We aim to protect the downside through hard assets and disciplined structuring and to pursue upside through equity participation and lender relationships with the potential to compound.
These developments are not a reason to reposition; they are the thesis we underwrote years ago, now arriving. We have long held this to be a matter of when, not if, and we remain happy to build while others wait.
We appreciate your continued trust and look forward to updating you as we expect these tailwinds will continue to translate into fundamentals.
Sources:
DEA rescheduling hearing: U.S. Department of Justice, “Justice Department Places FDA-Approved Marijuana Products… in Schedule III” (Apr. 23, 2026); DEA, “Marijuana Rescheduling Regulatory Actions”; Federal Register, Notice of Hearing, 91 FR 22777 (Apr. 28, 2026); Forbes, “DEA Kicks Off Historic Hearing on Cannabis Rescheduling Proposal” (Jun. 29, 2026).
Hemp restrictions and legislative status: P.L. 119-37, Division B, Section 781 (signed Nov. 12, 2025; new hemp definition effective Nov. 12, 2026); Congressional Research Service, “Changes to the Statutory Definition of Hemp,” IF13136 (May 2026); Marijuana Moment, “House Passes Farm Bill… Without Delaying THC Product Ban” (Apr. 30, 2026).
Trulieve NYSE uplisting: Trulieve Cannabis Corp., “Trulieve Announces Uplist to NYSE” (Jun. 5, 2026); Forbes, “Trulieve Makes History With First NYSE Cannabis Listing” (Jun. 5, 2026).
Glass House NYSE uplisting: Glass House Brands Inc., “Glass House Brands Announces Uplist to NYSE” (Jun. 25, 2026); SEC Form 6-K (Jun. 17, 2026).
Virginia adult-use market: Office of the Governor of Virginia, “Agreement to Create a Safe, Legal, and Well-Regulated Adult-Use Retail Cannabis Market” (Jun. 16, 2026); ABC News (Jun. 2026).
Georgia medical expansion: Marijuana Moment, “Georgia Governor Signs Bill to Expand Medical Marijuana Access… Allowing Vaping” (May 12, 2026); Cannabis Business Times, “Georgia Legalizes Medical Cannabis Vaping, Replaces Restrictive THC Cap” (May 13, 2026).
Chicago Atlantic history and deployment: Firm records; Chicago Atlantic, “About” and press releases (founded 2019; over $2 billion in credit and equity investments to date), chicagoatlantic.com; Chicago Atlantic Real Estate Finance, Inc. (NASDAQ: REFI) public disclosures.
Rhode Island licensing: Rhode Island Current, “How Will Rhode Island’s New Cannabis Retail License Lottery Work?” (Mar. 13, 2026); Rhode Island Cannabis Control Commission, adult-use retail license materials.