Just been digging into Verano Holdings and the whole US cannabis situation is getting interesting again. Their stock popped 40% over the past year, and honestly there's a real story here worth unpacking.

So here's what grabbed my attention. Back in December, Trump signed an executive order pushing federal agencies to reschedule marijuana from Schedule I to Schedule III. If that actually happens, it's genuinely significant for the US cannabis sector. The big unlock would be eliminating IRS Code 280E, which currently prevents cannabis companies from deducting normal business expenses. That's crushing their tax rates. If that changes, you're looking at real improvement in profitability and cash flow for scaled operators like Verano.

But here's where it gets messy. Verano's actual business is facing some real headwinds. In the first nine months of 2025, their retail sales only grew 1% year-over-year to $502.4 million. Wholesale revenues actually dropped 13% to $234.9 million. They're dealing with the same issues hitting the entire US cannabis market - price compression, oversupply, and promotional discounting just to move product. Gross margins compressed about 100 basis points down to 50%.

The company did cut SG&A expenses by 7% to $251.5 million, so they're at least being disciplined on costs. And they just moved their corporate domicile from BC to Nevada, which should help with US capital market acceptance. But fundamentally, Verano operates only in the US market, which means they're fully exposed to all the saturation and fragmentation happening here.

Meanwhile, competitors like Cresco and Tilray are expanding internationally into Europe, which gives them diversification that pure US cannabis players don't have. That's a real competitive disadvantage for Verano and Green Thumb Industries.

So where does this leave you? The regulatory tailwinds from potential rescheduling are real and could be transformative long-term. But near-term, Verano's dealing with legitimate revenue pressures and margin compression. They're betting on operational efficiency and retail expansion to drive momentum, but it's not happening fast.

My take: if you already own it, hold and watch how they execute on the profitability roadmap. If you're thinking about getting in, I'd probably wait for clearer signs of revenue acceleration before jumping in. The regulatory environment is definitely shifting in favor of the US cannabis industry, but that doesn't mean every operator is going to benefit equally. Verano's got the scale and focus, but they need to show they can actually grow the top line again.