Final week, U.S. President Donald Trump signed an government order directing federal companies to reclassify marijuana from Schedule I to Schedule III beneath the Managed Substances Act.
This rescheduling was probably the most vital shift in U.S. hashish coverage in over 5 many years. The transfer permits medical hashish corporations to deduct normal enterprise bills beneath IRS guidelines for the primary time and improves entry to banking and institutional capital.
The Facilities for Medicare and Medicaid Companies will launch an April pilot program that allows sure Medicare seniors to obtain free, doctor-recommended CBD (cannabidiol) merchandise that meet native security requirements. Nonetheless, Trump emphasised the order doesn’t legalize leisure marijuana use.
The potential entry to conventional capital and a number of other different markets makes hashish shares a high funding possibility proper now. Investing in high quality hashish shares gives TFSA (Tax-Free Financial savings Account) buyers a possibility to generate outsized positive factors over the following few years.
One such high hashish inventory is Curaleaf (TSX:CURA), which is valued at a market cap of $3.2 billion. Curaleaf inventory has risen greater than 80% in 2025. Regardless of the latest uptick, it trades 82% under all-time highs.
The bull case of investing on this TSX hashish inventory
In Q3 2024, Curaleaf reported income of US$320 million, a 3% year-over-year decline. The hashish producer attributed the autumn in gross sales to double-digit value compression throughout all markets, which offset quantity positive factors.
Curaleaf introduced a restructuring initiative 12 months in the past to give attention to genetics enchancment, provide chain optimization, and retail realignment.
Curaleaf reported gross margins of fifty%, increasing 115 foundation factors yr over yr regardless of pricing headwinds. The margin enchancment was tied to cultivation effectivity positive factors that elevated common flower efficiency above 30% for the primary time in firm historical past.
Administration additionally credited the Darkish Coronary heart genetics program and disciplined rising strategies to yield enhancements throughout the cultivation community.
The marijuana big reported US$53 million in working money and US$37 million in free money move in Q3, which meant it allotted US$16 million in direction of capital expenditures. It diminished stability sheet debt by US$28 million and ended Q3 with US$107 million in money.
Worldwide income rose 56% yr over yr, pushed by Curaleaf’s positive factors within the U.Okay. and Germany. This section can be a key driver of future progress even because it diminished EBITDA (earnings earlier than curiosity, tax, depreciation, and amortization) by 120 foundation factors.
Administration resolved near-term German provide constraints by having regulators carry import allow caps, offering enough headroom for the following a number of quarters.
Curaleaf retired US$30 million of acquisition debt after quarter-end, finishing its Tryke obligation and leaving roughly US$70 million payable over two years. It secured a US$100 million revolving credit score facility with Needham Financial institution at 8% curiosity, which supplies it with the pliability to refinance higher-cost debt.
Is the TSX inventory undervalued proper now?
Analysts monitoring Curaleaf inventory forecast income to extend from US$1.3 billion in 2025 to US$1.7 billion in 2029. On this interval, free money move is projected to enhance from US$82.4 million to US$540 million.
If the TSX hashish inventory is priced at 10 occasions ahead FCF, which is comparatively low cost, it may return over 120% throughout the subsequent three years.
