As spring turns into summer, cannabis investors will increasingly focus on Department of Justice (DOJ) and Drug Enforcement Administration (DEA) hearings to consider whether they will reschedule recreational-use cannabis.

I expect cannabis stocks will rise as the June 29 hearing launch gets closer, due to elevated expectations that the rescheduling of medical cannabis creates momentum that will follow through to rec-use cannabis.

However, I will look at any significant sector strength due to the hearings as a liquidity event.

The reason: It is not at all clear the administration of Donald Trump will reschedule rec-use cannabis. That’s because Trump himself is not favorable towards cannabis use in general. He likes medical use. But for the rest, not so much. And despite polls showing majorities of voters support the rescheduling of rec-use cannabis and even legalization, there’s really no groundswell of support in this administration, or among conservatives, for further cannabis reform.

Even if the DOJ and DEA eventually do reschedule rec-use cannabis, it will likely take a significant amount of time for that to happen. Many cannabis CEOs and commentators are predicting the change by the end of the year. That timeline seems overly ambitious.

Timing exits in cannabis trading positions will be difficult because stocks may potentially rally on testimony during the hearings and not just the hearing launch.

However, the bottom line is that hearing-related strength should be sold by traders, since likely post-hearing sector weakness will allow for re-entries at better prices.

Long-term investors should consider simply holding through. That’s because states continue to advance cannabis normalization, which will help companies in the space. Here are the most recent developments.

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It’s particularly notable that conservative, Heartland and Southern states continue to come around on cannabis legalization and normalization. Cannabis normalization is no longer just a liberal, coastal state thing. Consider these recent eight developments that are bullish for cannabis companies.

* Indiana Republican Sen. Mike Bohacek recently said he is developing a bill to legalize medical cannabis, which he may introduce next year. Republican Governor Mike Braun has said he is open to the change. Indiana is one of the few states that still bans both medical-use and recreational-use cannabis sales. The reform effort follows federal rescheduling of medical cannabis earlier this year, a move that may be encouraging Republican-run states to reconsider their cannabis bans.

“There are plenty of benefits medical marijuana can have, not only in a healthcare capacity,” said Bohacek. “There is potential to bring in millions of dollars in tax revenue every year.” The nine states that haven’t yet legalized medical cannabis all have Republican-led legislatures and no ballot initiative process.

* Idaho cannabis reform advocates have submitted twice the number of signatures needed to get a medical cannabis legalization referendum on the ballot in November. Advocates recently turned in over 150,000 signatures, more than double the 70,725 signatures needed. The reform initiative, called the Idaho Medical Cannabis Act, would authorize the sale and possession of medical cannabis, as well as distribution and home grow. Patients would be able to apply for medical cannabis cards beginning July 1, 2027. Qualifying conditions include cancer, HIV, Alzheimer’s disease, ALS, anxiety, autism, Crohn’s disease, epilepsy, insomnia, multiple sclerosis, and muscle spasms, among others. The initiative also directs the Idaho State Board of Pharmacy and the Idaho Department of Health and Welfare to oversee medical cannabis sales.

* Georgia Governor Brian Kemp (R) has signed a law that expands the state’s medical cannabis program by including new qualifying conditions, increasing the allowable potency levels and allowing vapes.

* Two-thirds of Utah voters support expanding Utah’s medical cannabis program, says a recent poll. It found that 60% of Republicans, 86% of Democrats and 69% of independents support the change. A slim majority, or 52%, also backs the legalization of recreational use. The poll was conducted by Noble Predictive Insights. It was paid for by Keep Utah Medical. Utah legalized medical cannabis in 2018.

* A majority of Ohioans, or 60%, think cannabis legalization “has been good for local communities,” while 53% think “their community would be better off if more adults used marijuana on a regular basis,” according to a recent poll. It also found that 41% of Ohioans say they use cannabis, and 62% think cannabis is a “relatively innocent drug that poses few risks to users” compared to other drugs.

“Ohioans believe that using marijuana is relatively safe and is more acceptable now that it is legal,” says Public Opinion Strategies, which conducted the poll. It was commissioned by the OneOhio Recovery Foundation.

* Iowa lawmakers approved legislation that would double the number of medical cannabis stores allowed in the state to ten. The bill now goes to Gov. Kim Reynolds (R).

* And then there’s Virginia, where, oddly, possession and home grow are legal in the state, but sales are not. Medical cannabis sales are permitted.

Governor Abigail Spanberger (D) recently vetoed legislation that would have legalized recreational-use cannabis sales and established regulations to govern cannabis businesses in the space. She said she still favors the change. But she cited concerns about a “rushed timeline” to launch the legal cannabis market, and proposals to create “far more stores” than she thinks are necessary. She also wanted to increase cannabis-related taxes and create new criminal penalties for cannabis consumers.

Spanberger’s veto may seem like a setback for cannabis reform. But Virginia will come around.

One reason is that a survey conducted before she vetoed the bill found that 70% of voters either strongly or somewhat agreed that she should allow the legislation to become law. Support crossed party lines, with 70% of Democrats, 64% of Republicans and 74% of independents backing the change. The survey was conducted by Public Policy Polling.

Virginia lawmakers may circumvent Spanberger’s veto by putting cannabis reform language into the state budget.

* Finally, the California Assembly recently passed a bill that would allow cannabis stores to offerdrive-thru windows for customers. The measure was approved 55-9. It now goes to the state’s Senate for consideration.

If drive-through cannabis service does not symbolize the broadening normalization of cannabis use, which is bullish for cannabis companies and investors, I am not sure what does.

For more details on favorable trends and the two big federal-level cannabis catalysts on the near-term horizon, and the best cannabis companies to own to benefit, consider subscribing to Cabot Cannabis Investor here.

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