The intoxicating-hemp crackdown has added another layer of uncertainty for some publicly traded cannabis companies – most of which are still struggling to find a sustainable economic footing.
Curaleaf Holdings is particularly vulnerable, as a federal ban on hemp-derived THC intoxicants looms. As part of its diversification strategy the company relied on THC-hemp vapes, low-dose drinks and edibles. The loss of this channel will compound existing pressures from an oversupply as well as soft demand.
New York-based Curaleaf launched a hemp-derived THC product line mid-2024 via its direct-to consumers ecommerce platform, under the “Hemp Company”. In a 2024 June press release, they emphasized that this was a move to expand into a rapidly growing market.
Growth Path is Blocked
Curaleaf made it clear in its messaging that hemp-THC was not an afterthought, but rather a significant growth area. The company, however, has not disclosed the actual revenue generated by these products. It only says its hemp business reduces the company’s overall profitability, but provides no sales details — leaving its exposure to the federal ban unclear.
Curaleaf’s latest financials reveal the strain the firm is under: the company has generated over US$900m in revenue, but it still suffered substantial losses. Even though it generated positive operating cashflow, the company remained unprofitable.
Tilray’s Problems
Tilray Brands, also based in New York, has sounded the alarm that tightening federal regulation of hemp-derived THC products — combined with its own reverse stock split — threatens to further destabilize a stock already under intense pressure.
Tilray said in a press release earlier this month that the recent ban on funding for the U.S. federal government was “misguided” as well as “prohibitionist.”
Tilray, which has positioned itself as “a leading global lifestyle and consumer packaged goods company” blending cannabis, beverages, wellness and hemp-wellness, said the regulatory changes will likely derail a key avenue of the company’s future U.S. growth – noting, however, that hemp-derived THC products nonetheless “are not a material part of our revenue” at present. The mere possibility of losing markets or a negative regulatory image may discourage investors from investing and cause future plans to be complicated.
Reverse stock splitting: Awful!
Tilray’s announcement in late November of a one-for-10 reverse split effective December 1, 2025 has added to the investor anxiety. It means approximately every 10 existing stocks will be merged into one. The stock price dropped by more than 20 percent immediately following the announcement.
Tilray claims that the division is intended to reduce costs and make Tilray more appealing to investors. But reverse splits are often viewed as a red flag — many see them as defensive actions when a company is struggling.
‘Wellness’ focused companies
Most CBD “wellness” companies, such as Charlotte’s Web in Charlotte, North Carolina or Charlotte, Colorado-based Charlotte’s Web (which is based out of Louisville), are less at risk because they do not rely upon delta-8, THCA or other psychoactive cannabinoids.
However, these companies are not in a better financial position. In their most recent quarterly reports for 2025, they continue to report net losses with shrinking revenues. Margins are also tight. They haven’t reported any sustained profits, nor has cost cutting produced meaningful results.