Is a New Chapter Starting for Cannabis? | Ttb Weekly Recap

Hey everyone, what a week for the cannabis industry over the last seven days. This could have been the most action-packed week we've ever seen in this industry. From news out of Washington, to the midterm elections, to M&A, to earnings season. And let's not forget as well, the ALJ proceeding hearings expired on Thursday and now in the hands of Derek Julius to see what his recommendations will be. So again, this week had it all. From Democrats regaining control of both the House and Senate Senate, following Tuesday's midterm election. We also saw Texas elect three major supporters of cannabis reform, Massachusetts voters overwhelmingly rejecting an attempt to repeal legalization, and a longtime advisor to President Trump is now urging him to work with Democrats on federal marijuana legislation. And on top of that, you had the DEA's latest rescheduling arguments are now complete. President Trump has also replaced his White House chief of staff, and several marijuana cannabis companies reported their third quarter earnings. And to top it all off, pertaining to that, Organigram, they just announced a major acquisition agreement involving Aurora Cannabis, which is backed by British American Tobacco. So really, could this week's developments mark the beginning of a new chapter of the cannabis industry? Well, let's state the obvious. Looking back for years, federal cannabis reform, it has struggled to move through Congress. And yes, we've been down this road before with Democrats promising cannabis reform, only to see very little progress when they controlled Washington back during the Biden administration. But this week, following Tuesday's election, The political landscape obviously looks a lot different. And looking at big picture here, we haven't seen this level of support coming from so many new elected officials, particularly in states where they traditionally opposed legalization. And perhaps more importantly, we're now seeing growing interest in cannabis reform from both sides of the political aisle. And that is important. Still, though, there's plenty of work ahead. But the opportunity for bipartisan cooperation, it definitely appears to be expanding. mean by that? Let's begin with the midterm elections. Democrats have now regained control of both the House of Representatives and Senate, taking control of Congress beginning in January of 2027. And several election results definitely stood out. First, of course, is Texas, where Democrat James Tallarico defeated Ken Paxton to win a U.S. Senate seat. Meanwhile, Gina Hidalgo, she defeated Republican Governor Greg Abbott, while Vicki Goodwin defeated Lieutenant Governor Dan Patrick. Again, I can't believe that was a sweep. And guess what? All three are supporters ...orders of cannabis reform and... And considering Abbott and Patrick, who spent years opposing broader legalization while supporting restrictions on intoxicating hemp products, that is a big political change in the Lone Star State. But there's also another development worth pointing out. Following his victory, Tallarico appeared on Fox News Wednesday morning, where he specifically identified marijuana legalization as an issue that he wants to work with President Trump on. Tallarico said he wanted to work with the president to legalize marijuana and reform the criminal justice system. system. All telling signs. Because really, if you think about this, you now have a newly elected Democratic senator from Texas appearing on Fox News and publicly expressing his willingness to work with President Trump on federal marijuana legalization. So he's backing up some of those words even after an election win. Let's hope this follows through, right? Because we don't see stuff like this very often. So a lot of moving parts over the last seven days. So welcome, everyone, to our latest weekly recap presented by Free. I am your host, Shad Dales, where we break down down the biggest developments in the cannabis industry over the past the past seven days, we're covering federal and state reform. We're also covering the investment side and the business stories that definitely are impacting publicly traded cannabis companies. And if you haven't done so already, make sure you're subscribed to us here at TDR so you can stay updated on all the latest news analysis and definitely developments happening throughout the cannabis industry. And there is a lot of stuff that's going to be developing over these next couple of weeks. So again, if you haven't done so make sure you're subscribed. Now, as I've said I do believe President Trump could eventually sign federal cannabis legalization legislation if Democrats approach him with the right proposal. That is going to be key. But they also need to learn from what happened during the Biden administration. Looking back, both Chuck Schumer and Cory Booker, they spent years pushing legislation with extensive social equity provisions. And ultimately, guess what? Nothing got done. But this time, I do believe the focus needs to be on regulation, public safety, taxation, banking, and creating a functioning And there are some encouraging signs that back that up. First up, Congresswoman Dina Titus, co-chair of the Congressional Cannabis Caucus. She told Marijuana Moment this week she sees increased opportunities for bipartisan cooperation following Tuesday's election. Meanwhile, you also have longtime Republican political advisor Roger Stone saying he would encourage President Trump to sign cannabis legislation sent to him by the incoming Democratic Congress. So all encouraging signs, but it doesn't guarantee. But it tells you that support for reform is coming from both political directions. And let's face it, if Democrats are serious about getting this done, they'll need to find some common ground with President Trump. Let's hope this gets presented the right way. Now, staying with Tuesday's elections, get this, Massachusetts delivered one of the most decisive cannabis-related election results we've seen in years. So earlier this week, approximately 76% of voters rejected Question 8, which would have eliminated the state's leak. Legal Recreational Cannabis Marketplace. Think about that number, everyone. Massachusetts originally approved legalization back in 2016. Support was around 54%. Ten years later, roughly three out of four voters rejected an attempt to reverse that decision. Big numbers. For smart approaches to marijuana, otherwise known as SAM, this was a major defeat. And I'm okay with that. As I've said in previous episodes, the cannabis industry, as we know, has spent years fighting outdated stigmas. And in my opinion, Massachusetts just sent a very clear message to the rest of the country. What is that? Regulated cannabis markets aren't going anywhere, period. Okay, let's now turn to Washington. And according to Marijuana Moment, the DEA and opponents of marijuana rescheduling submitted their final briefs on Thursday of this week. So the temporary stay in the administrative hearing has now expired, and the process now moves towards a recommendation from administrative law judge Derek Julius. on that, but hopefully it comes soon. So the DEA, they continue defending the scientific and medical evidence supporting Schedule 3. On the other side, opponents, they argue that problems with the government's review process undermines the proposal. Again, procedural, nothing scientific. So as I said before, Julius must now issue his recommendation before DEA Administrator Terrence Cole makes the final decision. And as I said, there is no guaranteed timeline, but it's another Another stage of this lengthy proceeding. It's now. Now complete, so let's get on with it. And also remember, broader cannabis rescheduling remains separate from the medical changes already implemented earlier this year. Medical, Schedule 3, broader cannabis still Schedule 1. And before we head to earnings, one more important development in Washington this week. This was big news on Friday. President Trump, he announced that Stephen Miller is going to replace Susie Wiles as White House Chief of Staff. So why does that matter? And more specifically, why does that matter for the hemp industry? Well, again, Wiles' son-in-law is Brett Worley from MC Nutraceuticals, a major hemp-derived cannabinoid supplier. And with federal restrictions on intoxicating hemp products scheduled to take effect on December 11th, the leadership change now raises questions about the industry's influence inside of the White House. Of course it does. Now, I do want to be clear that there's no evidence that Miller has announced a new position on hemp, and the White House has denied that Wiles improperly influenced hemp policy. But the optics don't look good. Good. And now with the deadline approaching, it's another development we definitely will be watching. Okay, let's now switch to the business side. Did we forget about that? There was a lot of major cannabis operators who reported Q3 2026 earnings this week. So let's begin with Trulieve. The company reported $230 million in quarterly revenue with an impressive gross margin of 64%. Adjusted EBITDA reached $89 million while free cash flow totaled $45 million as well. Well, Trulieve also finished September with approximately 327 million dollars in cash. All right, let's now move to another heavyweight, and that's Green Thumb Industries. The company reported $324.4 million in revenue, an increase of 11.3% year-over-year. Normalized EBITDA reached $89.4 million, while operating cash flow came in at $58.3 million. GTI ended the quarter with $316 million in cash. Meanwhile, let's keep this going. And Curaleaf reported record quarterly revenue of approximately $353 million, increasing nearly 11% year-over-year, and adjusted EBITDA reached approximately $78 million, while international revenue climbed to $59 million. You can thank Germany on that one. And finally, Terrasan, keep your eye on this company. They reported $68.2 million in revenue, increasing 5% year-over-year, adjusted EBITDA reached $17.5 million, while free cash flow totaled $6.1 million. And guess what? That marks Terrasan's 13th consecutive quarter of positive free cash flow. So could this be an acquisition target once M&A gets into full season come 2027? Could be, but a great balance sheet that Jason Wild and team keeps performing. Well done, Jason and Ziad. Also, I want to highlight there was a number of other companies that also reported their latest earnings. So if you haven't done so, make sure you scan this QR code and become a Daily Baked In newsletter subscriber. We have the rundown of every single report that happened this week. You'll get a chance to glance back at what we reported on over the past seven days. So if we missed anything, any company here in our weekly recap. Again, scan this QR code and become a baked-in newsletter subscriber now. We have the full analysis of every single company. And looking back at these latest earnings, really, this is what stands out to me right now, everyone. When you look at this, the challenges the industry has faced, we're seeing several major operators continuing meaningful cash flow. So while you, the investor, remains focused on Washington and myself included, these companies are still executing operationally. Ultimately, federal reform is going to create opportunities, opportunities, but we know financial performance is going to determine what companies are best to be capitalized. And right now we saw a lot of record numbers again produced with some of the top companies in the industry. So really keep your eyes on these companies and how the industry expands on so many levels in 2027. And more importantly, when M&A season kicks in, it's going to move and move fast. You can bet those conversations are happening right now. And speaking of M&A, one last story before we close out this week's weekly recap. Organigram has now entered into a definitive agreement to acquire Aurora Cannabis in a transaction that's valued Approximately $561 million Canadian dollars. The agreement values Aurora at $7.80 per Canadian share, with shareholders able to elect cash. Organigram shares are really a combination subject to limits. But there's also another important part. British American Tobacco is backing the transaction with a planned $187.5 million Canadian investment in Organigram. So the agreement, it follows Aurora's rejection of Curaleaf's hostile takeover proposal. And if completed, the transaction would combine Organigram's Canadian market position with Aurora's International Medical Cannabis Operations. Would create a big company. Both boards right now, they support the agreement, although shareholder, regulatory, and court approvals clearly are still required. The companies are targeting right now January 2027 for completion. So for me, this is a big consolidation announcement if it works out. We've been discussing this for months. What What Boris Jordan does next, we'll wait and see, but I wouldn't be surprised. to see additional companies examining opportunities like this. Of course they will, everyone. So in closing, looking back over the past seven days, plenty of news for cannabis investors to digest. We have a new political landscape in Washington. We also have growing bipartisan discussions around legalization. Another stage completed in the DEA proceedings and cannabis operators continuing to generate cash flow. You need cash, baby. So for me, looking back at these last seven days, Today's Tuesday was the big news. We've seen Democrats promise cannabis reform before, but really what I think is different this time is the number of newly elected officials that are supporting legalization and the possibility of working with a Republican president who's already taken steps towards federal cannabis reform. So whether that translates into legislation, obviously it remains to be seen. But on paper, it looks encouraging. So if Congress and President Trump can find common ground, then we know the next two years, it could look considerably different in this industry. Hey, it's needed, and it's long overdue, and it's something, again, we'll be watching closely. So thanks, everybody, for joining into this week's Trade to Black Weekly Recap, presented by Free. I'm your host, Shad Dales. Again, make sure you like, subscribe, and smash on that bell for all notifications. A lot of news coming down the next little bit. When will these recommendations come down? We're also talking about the hemp ban. Don't look, but this week's synthetic conversions get banned on November 12th. That is already done. So the next date is December 11th. Plus, some of the M&A action that's taking place. So again, a lot of stuff moving right now, so make sure you stay connected. Like, subscribe, and smash on that bell for all notifications. And again, stay connected with me and the team here at TDR. That's it for now, everyone. Thanks again for logging on to our latest Trade to Black Weekly Recap. I'm your host, Shad Dales, and I'll see you in the next one. Take care, everyone.