Cannabis Sector Could See 100% Valuation Upside, per ATB — So Why Aren’t Investors Buying Yet?

A new set of reports from ATB Capital Markets analyst Frederico Gomes suggests that while cannabis rescheduling is widely expected and potentially transformative, investors are still hesitant to commit capital.

The data shows a clear disconnect:

55% probability assigned to rescheduling within the next 12 months
87.5% of investors expect it to happen during Trump’s term
Yet only 17.6% of funds increased exposure to cannabis stocks in the past six months

A De-Risking Event — With Timing Risk Attached

According to ATB, rescheduling represents a major de-risking event for cannabis. It removes 280E tax burdens, improves earnings visibility, and lowers the cost of capital.

But timing remains uncertain.

If regulators move directly to a final ruling, rescheduling could happen quickly. If hearings are triggered, the process could extend into 2027

That uncertainty is critical. Even after a final ruling, the process includes a 30-day judicial review window for legal challenges, and a 60-day congressional review period before implementation

This creates a prolonged window. Expect volatility.

Valuations: The Upside Is Real — and Not Priced In

ATB’s analysis is clear: the market is still underpricing the impact of rescheduling. Tier 1 MSOs are currently trading at around 6.5x EV/EBITDA, but in a rescheduling scenario, multiples could expand to 10x or higher, with average potential valuations reaching approximately 14.1x across major operators.

That implies:

~54% to 100%+ multiple expansion potential
Equity valuations could approximately double

Investor expectations reflect this:

61.5% of investors see fair multiples at 10x or higher
46.2% expect the MSOS ETF to reach $10 or more

Investor Sentiment: Positive, But Passive

The most revealing insight from ATB Capital Markets’ April 2026 Cannabis Investor Sentiment Survey is behavioral.

Sentiment:

35.3% more bullish vs six months ago
41.2% unchanged
23.5% more bearish

Positioning:

47.1% unchanged exposure
35.3% decreased exposure

ATB attributes this to investor fatigue, driven by repeated delays in federal reform.

What Actually Drives Capital Back Into Cannabis

The survey identifies clear triggers for capital inflows:

Top drivers:

Rescheduling (ranked #1 by 47.1%)
Up-listings to major exchanges (35.3%)

Secondary factors:

IRS decisions on 280E liabilities (23.5%)

Notably:

State-level legalization ranks low
Hemp enforcement ranks lowest (50% ranked it least relevant)

This reinforces a key point: Federal reform is what unlocks capital.

Balance Sheets Come First

In the current environment, investors are prioritizing financial stability over growth.

Capital allocation preferences:

58.8% rank deleveraging as the top priority
70.6% rank it in the top two priorities

Growth seems to be secondary:

Organic growth ranked in the top two by 64.7%
M&A ranked top two by 41.2%

The Real Risks: Pricing and Taxes

Investors are focused on two main risks:

Price and margin compression
Accumulated 280E tax liabilities

Other concerns:

Rescheduling not happening
Equity dilution

Lower concerns:

Debt maturities (due to refinancing progress)

Canada and International: Optimism Without Capital

Outside the U.S., the pattern repeats.

Canada:

46.7% of investors are more bullish
But only 13.3% increased exposure

International:

30.8% more bullish
69.2% unchanged sentiment

Even with improving fundamentals, capital remains sidelined.

What Happens Next: Analysts’ Season Begins

ATB concludes that the sector depends on regulatory progress to unlock capital and drive valuations higher.

The numbers show a market that believes in the catalyst but is unwilling to price it in ahead of confirmation.

If rescheduling materializes as expected, the re-entry of capital could be fast and significant. If not, the gap between expectations and reality could widen further.

That’s exactly why conversations are shifting from expectations to execution — and why events like Cannabis Market Spotlight: Ohio Valley are becoming key venues where operators, investors, and decision-makers align capital, strategy, and next moves in real time.