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Ancillary Cannabis Stocks Continue to Lead as Broader Sector Struggles

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Ancillary Cannabis Stocks Continue to Lea

The cannabis investment landscape continues to shift in 2024, with ancillary cannabis companies emerging as the most resilient and promising segment of the market. While volatility persists across American and Canadian cannabis operator indices, ancillary stocks have demonstrated consistent strength, reflecting investor preference for businesses less exposed to plant-touching risks.

According to the latest index data from New Cannabis Ventures, ancillary cannabis stocks led sector gains in September, continuing their dominance in a year that has seen uneven performance across the board. As the industry awaits key federal developments—including potential rescheduling of cannabis by the DEA—ancillary players may be best positioned to weather uncertainty and capitalize on long-term growth.


A Look at the Three Key Cannabis Stock Indices

New Cannabis Ventures tracks three primary equity benchmarks: the American Cannabis Operator Index, the Ancillary Cannabis Index, and the Canadian Cannabis LP Index. Each reflects the performance of different segments of the North American cannabis market.


Ancillary Cannabis Index: 2024’s Clear Standout

Ancillary cannabis companies—those that provide products, services, or technology to the cannabis industry without directly handling the plant—have proven to be the strongest performing sub-sector in 2024.

September 2024 Highlights:

  • The Ancillary Cannabis Index rose 4.0%, closing at 16.12.
  • The index is now up 20.5% year-to-date, outperforming both plant-touching operator indices.
  • This follows strong gains in March and July, with a minor pullback in April and August.

Despite a sharp decline in 2022 and a modest dip in 2023, ancillary cannabis stocks have rebounded sharply. While the index remains down nearly 84% from its inception in March 2021, recent trends suggest a more sustainable recovery.

Top and Bottom Performers in September:

  • Best performer: Scotts Miracle-Gro (NASDAQ: SMG), up 22.2%
  • Worst performer: WM Technology (NASDAQ: MAPS), down 12.1%

Looking ahead to October, Ispire Technology (NASDAQ: ISPR) and Leafly (NASDAQ: LFLY) are set to rejoin the index, while WM Technology will be removed due to underperformance.

Why Ancillary Stocks Are Attracting Investors:

Ancillary companies typically face fewer regulatory constraints and are less exposed to state-by-state cannabis licensing issues. Many operate in ancillary verticals like:

  • Equipment manufacturing
  • Data analytics
  • Packaging and logistics
  • Software and technology platforms

These companies can scale more easily and access traditional capital markets, making them more attractive during periods of policy uncertainty.


American Cannabis Operator Index: A Volatile Climb

The American Cannabis Operator Index, which tracks U.S.-based multistate operators (MSOs), delivered a strong performance in September, rising 8.5% to 15.13. This rebound followed a difficult August, when sentiment dropped due to the DEA’s delayed action on rescheduling cannabis—a key policy decision that has kept institutional investors on the sidelines.

Year-to-Date Performance:

  • The index is down 1.4% in 2024 despite its September rally.
  • A high in April was followed by weakness in May through August before bouncing back.
  • The index has regained some ground from its all-time low set in August 2023.

September’s Notable Stock Movers:

  • Top performer: Trulieve (OTC: TCNNF), rising 40.2%
  • Worst performer: Ascend Wellness (OTC: AAWH), falling 13.1%

Index Changes:

Two companies, Grown Rogue (OTC: GRUSF) and Jushi Holdings (OTC: JUSHF), will exit the index in October due to low trading volume, reducing the number of members to 10.

Sector Challenges:

Despite operational progress, MSOs continue to face obstacles such as:

  • Limited access to banking and credit
  • State-by-state compliance burdens
  • Competitive pricing pressure and market saturation in mature states
  • Lack of federal tax reform (particularly IRC Section 280E)

While investor sentiment can quickly shift with policy developments, MSOs remain in a holding pattern, awaiting a clear signal on federal reform or rescheduling before institutional capital can flow in more meaningfully.


Canadian Cannabis LP Index: Still Searching for a Bottom

The Canadian Cannabis LP Index was the only major cannabis index to post a decline in September, falling 3.8% to 53.03. The index continues to struggle amid weak consumer demand, persistent oversupply, and ongoing financial challenges across licensed producers.

Year-to-Date Performance:

  • The index is down 12.9% in 2024, following declines of 16.2% in 2023 and 62.8% in 2022.
  • Canadian LPs remain far below their 2018-2019 highs, with many trading at pennies per share.

September’s Key Movers:

  • Aurora Cannabis (TSX: ACB): –2.6%
  • Canopy Growth (TSX: WEED): –7.7%
  • Cronos Group (TSX: CRON): –1.3%
  • Organigram (TSX: OGI): –1.2%
  • Tilray Brands (TSX: TLRY): +4.8%

Index Composition:

Only five of the nine companies in the index closed above C$1.00 at the end of September. Two companies fell below C$0.25, indicating sustained investor pessimism.

Adastra Holdings (CSE: XTRX) has exited the index for October due to a low share price.

Outlook for Canadian LPs:

Canadian producers face fierce price compression, export uncertainty, and limited growth opportunities in their domestic market. Companies are attempting to reposition through:

  • International expansion (particularly into Europe and Australia)
  • Diversification into non-cannabis segments like beverages or CBD wellness
  • Strategic M&A activity and operational consolidation

However, without significant changes to consumer behavior or regulatory frameworks, Canadian LPs may continue to underperform relative to their U.S. and ancillary counterparts.


Broader Market Trends and Takeaways

1. Ancillary Stocks Are Leading for a Reason

The continued outperformance of the Ancillary Cannabis Index highlights the resilience of companies that support—but do not directly touch—the plant. These firms benefit from broader industry growth without being subject to the same regulatory bottlenecks.

2. MSOs Show Potential But Remain Range-Bound

American cannabis operators are seeing occasional rallies, but performance remains choppy amid regulatory inertia and tax burdens. Companies that are improving margins and expanding strategically may outperform peers, but broad sector growth likely hinges on rescheduling or SAFE Banking legislation.

3. Canadian LPs Struggle to Regain Investor Confidence

After years of overvaluation and oversupply, Canadian LPs are still in recovery mode. With little domestic growth and tough global competition, only the most agile and diversified companies are likely to rebound in the near term.


Final Thoughts

September 2024 reinforced a growing theme in cannabis investing: resilience comes from diversification and strategic positioning, not just from holding licenses. Ancillary businesses are proving that supporting infrastructure and innovation can outperform cultivation and retail during periods of policy uncertainty and financial tightening.

For investors and operators alike, the focus should now shift to companies with strong balance sheets, operational discipline, and exposure to growth markets—regardless of whether they handle the plant directly.

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Tariffs and the Cannabis Supply Chain: How U.S. Businesses Are Adapting to Economic Headwinds

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Tariffs and US Cannabis Supply Chain

As cannabis operators in the U.S. navigate the complexities of a rapidly evolving industry, they now face another formidable challenge: shifting international trade policies. The recent reinstatement of steep tariffs under former President Donald Trump’s administration has put pressure on an already delicate cannabis supply chain, triggering a cascade of operational adjustments among producers, packagers, and distributors.

With tariffs ranging from 10% to more than 100% on a variety of imported goods, cannabis-related businesses that rely heavily on global manufacturing—particularly from Asia—are being forced to rethink long-standing logistics strategies. The new trade environment is not just a test of financial endurance but a stress test of agility, supply chain diversification, and risk management in a sector still maturing.


A Global Supply Chain Under Pressure

The cannabis industry’s reliance on international manufacturing is no secret. From packaging materials and pre-roll machinery to vape hardware and raw inputs, much of the sector’s critical infrastructure is sourced from global markets, especially China, Indonesia, and India.

These countries have been preferred partners not only due to cost efficiency but also because of their manufacturing capabilities, scale, and speed. However, as newly reimposed tariffs drive up the cost of importing these materials, companies are being forced to examine alternatives—some more viable than others.

Several operators have already begun reallocating parts of their production to secondary markets such as Malaysia, Taiwan, or Vietnam. Others are experimenting with onshoring portions of their supply chains back to the United States. Yet these shifts are often not straightforward; domestic infrastructure for specialized cannabis products remains underdeveloped, particularly when it comes to highly customized or small-batch manufacturing.


Rising Costs and Operational Trade-Offs

One of the immediate consequences of the tariff spike is an increase in production costs across the board. Businesses are now contending with a multi-layered cost structure that impacts not just raw materials but also labor, shipping, and warehousing. These increases are particularly difficult for companies operating in high-cost compliance states, where profit margins are already slim due to taxation, regulatory overhead, and price competition.

To manage these pressures, many companies are adapting in the following ways:

  • Restructuring their logistics networks by shifting imports to less tariff-heavy regions.
  • Consolidating packaging and labeling runs to reduce per-unit production costs.
  • Investing in automation to reduce reliance on international labor and shorten production cycles.
  • Building domestic partnerships with U.S.-based suppliers to insulate parts of their operation from trade volatility.

However, these adjustments come with their own costs and limitations. Not all products can be easily moved to a domestic facility, and retrofitting operations to accommodate local production may require capital outlays that smaller operators simply can’t afford.


Logistics and Distribution Face Ripple Effects

Tariffs don’t just impact product manufacturing—they also reverberate through the entire fulfillment and distribution chain. Cannabis logistics companies, which handle warehousing, transport, and last-mile delivery, are now facing inflated operational costs from imported vehicle fleets, routing technologies, and even temperature-controlled equipment used to transport perishable products like edibles or live resin.

As logistics become more expensive and uncertain, many companies are responding with tighter inventory management, improved routing software, and bundled service models to reduce redundancies. The goal is to maintain service levels without transferring too much of the cost burden to retail partners or end consumers—though many acknowledge that some level of price increase may become unavoidable.


The Consumer Experience May Shift

For consumers, the immediate impact may not be felt at the register—but industry insiders warn that changes are likely on the horizon. As supply costs rise and companies are squeezed between shrinking margins and growing overhead, the end result may be leaner product selections, higher shelf prices, or delays in new product launches.

Operators in ancillary sectors like accessories and packaging are also evaluating whether to absorb tariff-related costs or pass them on to dispensaries and their customers. For now, some are choosing to hold prices steady in order to protect brand loyalty, but this strategy may be difficult to sustain if inflationary pressures persist.

In the long run, consumers may begin to see subtle shifts in packaging aesthetics, material quality, or bundle sizes as brands recalibrate offerings to maintain profitability in a high-cost environment.


The Risk of Market Imbalance

A potential unintended consequence of escalating trade restrictions is the growth of unregulated markets. As licensed businesses contend with cost pressures, unlicensed operators—often unencumbered by the same tax and compliance burdens—may gain competitive advantage by offering cheaper products and faster delivery.

This could incentivize some consumers to shift toward gray or illicit market options, particularly in regions where enforcement is uneven or where legal cannabis remains comparatively expensive. Policymakers and regulators will need to consider this dynamic carefully, especially in states where legalization has been built on promises of consumer safety, tax revenue, and reduced black-market activity.


Is Onshoring the Long-Term Solution?

While some operators are exploring domestic manufacturing as a long-term solution, structural limitations remain. U.S. facilities may offer improved lead times, regulatory alignment, and greater control—but at significantly higher cost, especially for labor-intensive processes like hand-rolling cones or assembling vape cartridges.

For this reason, most companies are pursuing hybrid approaches: shifting select product lines stateside while maintaining offshore relationships for high-volume or commodity items. Others are leveraging the situation as an opportunity to invest in R&D and reevaluate product formats that are less reliant on tariff-exposed materials, such as pod-based vape systems or minimalist packaging designs.


A Test of Industry Maturity

Ultimately, the tariff issue underscores the cannabis industry’s transition into a more mature, resilient sector. What began as a grassroots movement is now a multi-billion-dollar supply chain exposed to global economic currents. Operators that succeed in this next phase will be those that invest in supply chain agility, diversified sourcing, and cost control without compromising product quality or brand integrity.

Tariffs are just one of many evolving variables in the cannabis economy—but they serve as a reminder that in an interconnected marketplace, adaptability isn’t optional—it’s a prerequisite for survival.

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Cannabis Use Rises in Response to Political Stress: A 2025 Consumer Snapshot

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As the United States adjusts to the early stages of Donald Trump’s second term, cannabis consumers appear to be recalibrating their habits—not just around preference or strain, but around coping itself. While cannabis has long been intertwined with wellness, stress relief, and cultural expression, new consumer behavior suggests that political and economic volatility is increasingly shaping how—and why—Americans engage with cannabis.

Rising inflation, social unrest, and sweeping government reforms have created a collective tension that is pushing many toward cannabis as a steadying presence in uncertain times. Whether as a substitute for alcohol, a buffer against anxiety, or a gateway to self-regulation, cannabis appears to be more than just a recreational outlet in 2025—it’s becoming an emotional anchor.

Younger Adults and Women Are Leading the Shift

One of the most pronounced shifts in 2025 is occurring among young adult consumers, especially women aged 21 to 34. Data collected from recent consumer trend reports indicate that this demographic is not only increasing their cannabis consumption more than others, but also doing so with a clear sense of intention.

Rather than associating cannabis solely with leisure, these users are engaging with products through a wellness lens, seeking out microdosing formats, low-THC ratios, and hybrid flower strains specifically marketed for stress relief, mood balancing, and mental clarity. For many, cannabis is becoming part of their daily rituals—whether it’s winding down after doom-scrolling the news or setting a calmer tone at the start of a work-from-home day.

This represents a fundamental evolution in cannabis culture, moving away from the archetype of occasional indulgence and toward habitual, purposeful use.

Inflation, Affordability, and the Price-to-Relief Ratio

In a year marked by economic anxiety, consumers are carefully weighing how they spend. Yet cannabis, unlike other discretionary categories, is holding its ground. While nearly every sector—dining, travel, entertainment—is facing demand softening, cannabis spending is showing resilience.

That’s not to say cost isn’t a concern. A growing portion of consumers report trimming expenses elsewhere to maintain their cannabis purchases. And interestingly, many of those who say they are increasing their usage also cite value-based product selections—such as larger pre-roll packs, discount ounces, or dual-purpose products like THC-CBD blends that combine relief and relaxation.

For this group, cannabis isn’t a luxury; it’s a mental health necessity with a higher perceived ROI (return on investment) than many other coping mechanisms.

Distrust in Retail Products Fuels Interest in Home Cultivation

Even as the legal market expands and matures, a significant number of consumers remain skeptical about the transparency of retail cannabis. Reports of product recalls, inconsistent testing standards, and labeling inaccuracies have planted seeds of doubt—especially among those who use cannabis for wellness or medicinal purposes.

As a result, home cultivation is gaining traction, not just as a hobby, but as a consumer rights movement. Among current cannabis users, a growing share say they would prefer to grow their own plants if legal and feasible. For many, the motivation isn’t just about savings; it’s about control, trust, and purity.

Although the legal frameworks for home growing vary from state to state, this trend suggests that personal cultivation may be on track to become a normalized part of cannabis culture, much like home brewing did during the early craft beer movement.

Product Preferences Reflect Broader Societal Shifts

Cannabis products in 2025 are being shaped by more than just potency or price—they’re being shaped by sentiment. Among the top-selling product categories this year are:

  • Fast-acting edibles marketed for anti-anxiety and sleep support
  • THC-infused beverages as alcohol substitutes
  • Low-dose tinctures and capsules designed for mood management
  • Topicals and aromatherapy-style balms for at-home stress rituals

These products are often branded in calming palettes with affirming language—”reset,” “unwind,” “clarity”—and appeal to a consumer base that’s not just looking to get high, but to feel grounded amid national turbulence.

This reflects a broader shift in consumer expectations, where cannabis is not merely transactional but therapeutic, intuitive, and holistic.

Legal Fears and Policy Confusion Create Mixed Signals

Even in legal states, concerns about enforcement and overregulation remain. A notable segment of consumers who are eligible to grow their own cannabis or purchase from licensed dispensaries still report hesitation due to perceived legal risks or confusion about what’s allowed under changing state laws.

This hesitancy reveals a gap in consumer education—and an opportunity for brands and advocacy organizations to clarify local regulations, dispel myths, and empower consumers to engage with cannabis confidently.

It also highlights the strange duality of being a cannabis consumer in 2025: legal in principle, stigmatized in practice. And for politically engaged users, that contradiction only adds to the urgency of normalizing use as a legitimate form of wellness and personal autonomy.

Looking Ahead: A Political Stress Test for Cannabis Culture

In past decades, cannabis consumption often spiked during moments of cultural upheaval. From anti-war protests to economic recessions, cannabis has long served as both an act of resistance and a tool for resilience. What we’re seeing now in 2025 is not entirely new—but it is more mainstream, measurable, and multidimensional than ever before.

This year, cannabis consumption patterns are becoming a reflection of political and emotional fatigue—a nonverbal statement that many Americans feel more agency in choosing their coping methods than they do in choosing their elected officials.

It also underscores the growing understanding that cannabis is not a trend but a toolkit, with distinct benefits that meet a wide array of emotional, psychological, and even political needs.

Final Thoughts

As the country navigates a politically volatile climate, cannabis use is increasing not as an escape, but as a way to manage the moment. Consumers are redefining their relationship with cannabis—using it not just to unwind, but to stabilize, to reclaim a sense of balance, and to respond to the world around them on their own terms.

This consumer-driven evolution is shaping not just the future of cannabis retail but also how we understand public health, political engagement, and self-care in the 21st century.

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Leadership Shakeup in NYC Sparks Questions About the Future of Urban Cannabis Programs

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top NYC cannabis exec resigns

The departure of Dasheeda Dawson, the founding executive director of Cannabis NYC, has ignited a wave of speculation and scrutiny in New York’s cannabis community. While personnel changes are common in new government-led industry initiatives, this one carries greater implications—not only because of Dawson’s public profile, but also because of the timing.

As New York City continues to roll out its complex and often controversial adult-use cannabis market, the resignation of its most prominent cannabis policymaker marks a pivotal moment in the city’s effort to build an equitable industry from the ground up.

A Pioneering Appointment

Launched in 2022 under the NYC Department of Small Business Services, Cannabis NYC was created to support license applicants, guide regulatory implementation, and position the city as a hub for inclusive cannabis entrepreneurship. Dawson, a veteran cannabis policy strategist with prior leadership roles in Oregon and national cannabis equity circles, was tapped to lead the effort.

During her tenure, Dawson was widely credited with raising visibility for the city’s cannabis equity goals and launching community-facing initiatives meant to support underrepresented entrepreneurs, legacy operators, and small businesses navigating the evolving legal market.

From educational workshops and compliance bootcamps to support for women- and BIPOC-owned businesses, Cannabis NYC under Dawson took bold steps to bridge the gap between policy ambition and market access. Her departure, announced via LinkedIn, comes just as many of these initiatives are moving into more operational and enforcement-heavy phases.

Timing Raises Eyebrows—and Tensions

Dawson’s resignation arrives at a particularly sensitive time for New York’s legal cannabis market. After months of legal battles, regulatory delays, and uneven retail rollout, many stakeholders are looking to city and state agencies for stability and long-term clarity.

For some, Dawson’s departure raises questions about how aligned city and state cannabis priorities truly are. As dispensary openings continue to face bureaucratic hurdles and court-ordered pauses, business owners and advocacy groups alike are calling for more transparent leadership transitions and consistent messaging from public agencies.

The concern isn’t just about personnel—it’s about continuity in vision and execution.

The Bigger Picture: A Test for Urban Cannabis Governance

More than a local HR shakeup, this event reflects broader issues facing cannabis leadership structures in urban centers. As cities like New York attempt to build out cannabis economies that are not only profitable but equitable, the demands on municipal agencies—and their leaders—are high.

Balancing stakeholder expectations, political interests, community equity commitments, and regulatory compliance is a tightrope few have walked successfully. And while New York’s goals are ambitious, the leadership turnover underscores the fragility of those efforts when they’re tied too closely to individual figures.

This moment offers a critical opportunity for Cannabis NYC—and other similar municipal programs across the country—to assess whether they have the internal infrastructure, succession planning, and community trust needed to withstand changes in leadership without losing direction.

Controversy Complicates the Narrative

Though the official narrative frames the resignation as a career transition toward broader industry engagement, external factors have also fueled public curiosity. Reports of an ongoing investigation into workplace misconduct, which surfaced around the same time as the resignation, have created a distracting cloud over what had otherwise been a widely supported leadership run.

For an industry that often champions transparency and accountability, the intersection of personal conduct and public leadership can be especially damaging if left unaddressed. While details remain under review and no formal conclusions have been made, the optics are difficult to ignore. Leaders in the cannabis space are increasingly held to high ethical and professional standards—particularly when representing equity-forward programs in a highly scrutinized market like New York.

What Comes Next for Cannabis NYC?

As Dawson moves on, the city is expected to announce interim leadership in the coming weeks. Whether the agency maintains its current roadmap or pivots in a new direction remains to be seen. Key questions now facing the program include:

  • Will current pilot programs and equity workshops continue on schedule?
  • How will the agency handle transparency amid ongoing investigations?
  • Can the next leader build the same level of grassroots trust?
  • How will this leadership change affect license processing and small business support?

The success of Cannabis NYC may now depend less on the charisma of a single leader and more on the strength of the systems left behind.

Final Thoughts

The resignation of Dasheeda Dawson is more than a personnel update—it’s a reflection of the high-stakes nature of cannabis governance in the post-prohibition era. With trust, transparency, and execution under the microscope, public agencies must prepare for transitions like this without destabilizing the broader market they’re tasked with guiding.

As New York City continues its journey toward a regulated, inclusive cannabis industry, the next chapter of Cannabis NYC will be closely watched—not just by local stakeholders, but by other municipalities nationwide facing similar challenges in the push toward equity-centered legalization.

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