The $40 Billion Disconnect: Cannabis Use Hits 61.6 Million Americans While Public Cannabis Valuations Remain Stuck

For years, public cannabis equities have traded as though the industry’s growth story had stalled. Yet the latest federal data suggest something very different. According to the Substance Abuse and Mental Health Services Administration’s (SAMHSA) 2025 National Survey on Drug Use and Health, an estimated 43.8 million Americans used cannabis in the past month, while 61.6 million reported using it during the past year, up from 53.2 million in 2021. In other words, the consumer market continues expanding even as many of the industry’s largest public companies remain valued far below the levels investors assigned them just a few years ago.

The disconnect raises an important question for investors: if the customer base continues growing, what exactly is the market pricing?

Cannabis Has Officially Become A Consumer Staples Business

The latest NSDUH results reinforce a trend that has been building for years: cannabis is no longer behaving like an emerging niche product. Tens of millions of Americans now consume it regularly, placing it among the country’s largest consumer categories. The debate has largely shifted away from whether cannabis has mainstream demand and toward how companies compete for that demand.

For operators, success is increasingly determined by execution rather than consolidation, exponential growth, flashy deals, and consumer adoption. Market share, operating efficiency, consumer loyalty, distribution, capital discipline, and cash generation matter far more today than simply participating in a growing industry.

The Biggest Growth Engine Isn’t Gen Z—It’s Adults Over 26

One of the more overlooked findings in the federal survey is where growth is occurring.

While past-year cannabis use declined among adolescents and young adults between 18 and 25 from 2021 through 2025, it continued to increase among adults aged 26 and older.

That shift carries important commercial implications. Americans over 45 generally command significantly greater spending power than younger consumers. According to the U.S. Bureau of Labor Statistics, households led by Generation X spend about $95,700 annually, Baby Boomers roughly $70,200, and Millennials around $81,600, reflecting years of accumulated wealth, higher incomes and greater purchasing capacity.

For cannabis companies, that matters because these consumers are buying more and differently. Older adults are more likely to seek products positioned around symptom management, wellness, sleep, chronic pain and other medical applications, categories where consistency, dosing accuracy and product quality become increasingly important.

If cannabis ultimately moves into a Schedule III framework, that demographic shift could become even more meaningful.

A larger share of future demand may come from patients entering the market through physicians rather than traditional adult-use channels. That creates a commercial advantage for operators already producing under Good Manufacturing Practices (GMP) and Good Agricultural and Collection Practices (GACP), where standardized production, pharmaceutical-quality controls and medical-grade manufacturing can become meaningful competitive differentiators.

In other words, the industry’s next phase may find a catalyst for growth in capturing greater lifetime value from an older, higher-spending customer base whose purchasing decisions increasingly resemble those seen in traditional healthcare rather than consumer packaged goods.

Growing Demand Doesn’t Always Mean Higher Prices

Consumer demand is only one side of the equation.

Over the past several years, legal cannabis markets have experienced persistent wholesale and retail price compression as cultivation capacity expanded. Consumers have generally benefited through lower prices, but operators have faced a more challenging environment in which selling more product does not necessarily translate into stronger revenue growth or expanding margins.

That dynamic has become a recurring theme across public company earnings calls. Management teams at Green Thumb Industries (OTCQX: GTBIF), Trulieve Cannabis (NYSE: TRLV), and Verano Holdings (OTCQX: VRNOF) and other multi-state operators have repeatedly discussed competitive pricing, promotional intensity, and the need to offset lower realized prices through efficiency gains, disciplined cost controls, and improved operating leverage.

In other words, the investment case is about which companies can continue generating cash flow despite an increasingly competitive pricing environment.

What The Market Is Pricing Versus What The Consumer Is Doing

Against that backdrop, public equity markets continue assigning cautious valuations to many of the industry’s largest operators.

Green Thumb Industries illustrates the point. In its latest quarterly results, the company reported $300.2 million in revenue, $93.5 million in normalized EBITDA, $76 million in operating cash flow and $344.5 million in cash and cash equivalents, while continuing to repurchase shares through its existing buyback authorization. Operationally, Green Thumb has become one of the industry’s most consistently profitable operators, yet its market capitalization remains well below the levels investors once assigned the sector during its post-legalization boom.

Trulieve has taken a similar approach. The company generated approximately $287 million in quarterly revenue, $100 million in adjusted EBITDA and $42 million in free cash flow, continuing to prioritize profitability and cash generation over rapid expansion. Management has repeatedly emphasized operational discipline and margin preservation as pricing pressure persists across several key markets.

Vireo Growth (OTCX: VREOF) offers a different example. Rather than relying primarily on organic growth, the company has pursued one of the industry’s most aggressive consolidation strategies. Its latest quarterly results showed $106.2 million in GAAP revenue, $32.7 million in adjusted EBITDA, and $137.8 million in cash, while pro forma revenue reached $210.2 million following a series of acquisitions.

Verano demonstrates why investors have become increasingly selective. The company continues generating more than $200 million in quarterly revenue while remaining EBITDA positive, yet management has also acknowledged the competitive pricing environment affecting several mature markets. Investors today appear less focused on top-line growth alone and more concerned with each company’s ability to protect margins, generate cash flow, and allocate capital efficiently.

A valuation comparison reinforces just how selective investors have become.

Moneyball for Cannabis Stocks

Based on market data available in late July 2026, Green Thumb Industries traded at approximately 5.3x trailing EV/EBITDA, while Trulieve traded near 5.8x.

Verano Holdings carried one of the sector’s lowest multiples at roughly 3.6–3.9x, reflecting the market’s cautious view despite the company’s continued profitability.

Vireo Growth is more difficult to compare because its recent acquisition strategy has fundamentally changed the size of the business. Traditional trailing multiples understate that transformation, but using the company’s reported pro forma EBITDA and enterprise value produces an indicative multiple of roughly 4.4x.

None of these figures, by themselves, prove a company is undervalued. They do, however, illustrate how conservatively public markets are currently pricing operating earnings across the cannabis sector, even as consumer demand continues to expand.

Before the CFO Emails Us…

EV/EBITDA is also only one lens through which to evaluate cannabis operators. Because the metric excludes depreciation, amortization, capital expenditures and working capital requirements, it should be considered alongside cash flow generation, leverage, capital allocation and the sustainability of each company’s EBITDA. In an industry where cultivation facilities, compliance, manufacturing assets and retail networks require continuous investment, valuation multiples tell only part of the story.

In EBITDA we trust… mostly.

Retail Investors May Be Watching The Wrong Indicator

Much of the public conversation surrounding cannabis investing continues to revolve around federal reform, but the latest federal survey highlights a reality that has quietly continued regardless of Washington’s pace: Americans continue consuming cannabis in growing numbers.

The challenge seems to be monetization.

Falling wholesale prices, relentless price compression, Section 280E, fragmented state markets, duplicate compliance regimes, expensive debt, limited institutional ownership, scarce banking services, custody restrictions, exchange listing barriers, municipal caps, licensing uncertainty, oversupply, illicit-market competition, inflationary operating costs, fragmented supply chains, and the inability to deduct ordinary business expenses have created one of the most operationally demanding industries in North America.

Cannabis executives are expected to build highly regulated manufacturing businesses, operate under pharmaceutical-quality standards, raise capital without normal banking access, comply with dozens of different state rulebooks, absorb tax rates that would cripple most industries, and still deliver expanding margins quarter after quarter.

Public markets are pricing the extraordinary burden required to convert that demand into durable shareholder returns.

May the Cash Flow Be With You

The latest NSDUH data shows that consumers continue entering the market and the industry’s ability to adapt is no longer in doubt.

Public operators have spent years learning how to compete while absorbing tax rates few industries could survive, borrowing at double-digit interest rates, complying with dozens of different state regulatory regimes, building redundant operations because interstate commerce remains prohibited, and finding ways to generate cash flow despite persistent price compression.

The real question is whether Washington will listen to the more than 61 million Americans who already use cannabis and replace a prohibition-era framework with one that reflects today’s economic reality.

Descheduling would not guarantee higher stock prices, but it would remove one of the largest structural drags on the industry by eliminating Section 280E, expanding access to banking and institutional capital, accelerating medical research, strengthening legal employment, encouraging investment in pharmaceutical-grade manufacturing, and allowing companies to compete on innovation, efficiency, and product quality rather than price or regulatory arbitrage.

And maybe, just maybe, make cannabis stocks worth more. The opportunity is that the market may no longer need to price extraordinary regulatory risk into every dollar of future earnings.

If businesses can deduct ordinary expenses, borrow at competitive rates, access deeper pools of institutional capital, expand medical research, move products more efficiently, and compete within a stable federal framework, investors may begin valuing the industry less like a regulatory outlier and more like any other consumer packaged goods or healthcare sector.

That wouldn’t guarantee higher share prices—but it would remove some of the structural reasons they’ve traded at a discount for so long.

Want to go deeper? Join the conversation in Washington. On November 18, IgniteIt’s Cannabis Capital & Policy Summit will bring together operators, investors, lenders, policymakers and regulators in Washington, D.C. to discuss the very issues shaping the industry’s future—from federal descheduling and banking reform to capital markets, valuation, compliance and the next phase of institutional investment. If you want to understand not just whether policy will change, but how those changes could reshape business strategy, financing and shareholder value, this is the room to be in. Learn more and register for the event here: Cannabis Capital & Policy Summit – Washington, D.C.