Green Thumb Industries vs. Curaleaf Holdings: Which Cannabis Stock Could Win Biggest From DEA Rescheduling?

For years, cannabis investors have waited for one catalyst capable of fundamentally changing the economics of the U.S. marijuana industry.

That wait may soon be over.

The Drug Enforcement Administration (DEA) rescheduled cannabis from a Schedule I substance to a Schedule III substance last month. This is a very big deal (Schedule 1 drugs are considered extremely dangerous with no medical use, while Schedule III substances are considered less dangerous and has some medical uses.)

The biggest immediate impact would be relief from Internal Revenue Service tax rule 280E, which currently prevents cannabis companies from deducting many normal business expenses from income.

For multi-state cannabis operators already generating hundreds of millions in revenue, that could dramatically improve profitability and free cash flow almost overnight. And two specific marijuana stocks stand out as potential winners: Green Thumb Industries (OTC: GTBIF) and Curaleaf Holdings (OTC: CURLF).

But which stock could benefit the most?

Green Thumb may already have the strongest financial foundation

Green Thumb enters this potential rescheduling cycle from a position of unusual financial strength for the cannabis industry.

The company generated $1.2 billion in 2025 revenue, along with $348.4 million in normalized EBITDA (earnings before interest, taxes, depreciation, and amortization) and nearly $295 million in operating cash flow.

Even more important, Green Thumb remains consistently profitable under generally accepted accounting principles (GAAP) -- something very few major cannabis operators can claim.

In Q1 2026, Green Thumb reported:

• Revenue of $300.2 million
• GAAP net income of $15.4 million
• Normalized EBITDA of $93.5 million
• Cash balance of $344.5 million

Its normalized EBITDA margin reached 31%, which remains among the strongest in the U.S. cannabis industry.

This isn't a trivial data point because DEA rescheduling will likely amplify existing strengths.

Green Thumb already operates efficiently despite the crushing burden of 280E taxes. Removing part of that burden could significantly expand earnings and cash generation.

Management has already openly discussed the opportunity, noting that rescheduling and resulting 280E relief will create "meaningful flexibility" to reinvest into operations and future growth.

The company also continues aggressively buying back stock. Since September 2023, Green Thumb has repurchased roughly 29 million shares for about $200 million. That's unusual in cannabis, where many competitors remain heavily dependent on equity sales that lead to dilution and debt refinancing.

Curaleaf has more scale and possibly more upside

Curaleaf may not be as consistently profitable as Green Thumb, but it remains the largest cannabis operator in the world by revenue.

In Q1 2026, Curaleaf generated $324.2 million in revenue, including $47 million from international operations, which rose 35% year over year. Adjusted EBITDA reached $63.4 million with a 19.6% margin.

The company also recently refinanced debt through a new $500 million senior secured notes offering due in 2029.

But Curaleaf's biggest advantage may be its international footprint.

While Green Thumb remains heavily concentrated in the U.S., Curaleaf has been expanding aggressively into Europe, particularly Germany, where medical cannabis growth continues accelerating. The company recently acquired full ownership of its German subsidiary, Four 20 Pharma.

That diversification could become increasingly important if U.S. reform progresses slowly or inconsistently.

At the same time, Curaleaf's margins remain meaningfully narrower than Green Thumb's, and the company still carries a more leveraged balance sheet, meaning the company relies more heavily on debt to fund growth and operations. That can boost returns when business is strong, but it also increases risk because those debt payments still have to be made even when cash flow weakens, or the industry hits a downturn.

That creates a different type of opportunity, though.

If 280E tax relief substantially improves industrywide profitability, companies with weaker margins and larger tax burdens could potentially see the biggest percentage improvement in earnings.

In other words, Curaleaf may have more operating leverage.

Image source: Getty Images.

Which stock could win the biggest?

Green Thumb looks like the safer execution story.

The company already generates strong cash flow, maintains one of the best balance sheets in cannabis, and has demonstrated consistent operational discipline during an extremely difficult period for the industry. Now that the DEA has rescheduled cannabis, Green Thumb could emerge as one of the clearest long-term institutional winners.

Curaleaf, however, may offer the higher-risk, higher-reward setup.

Its larger scale, international exposure, and historically lower profitability mean rescheduling could potentially create a more dramatic earnings swing if tax burdens fall substantially and capital access improves.

Both companies could benefit enormously from more complete federal reform, such as national legalization. But if you're looking for the cannabis stock best positioned to capitalize on DEA rescheduling immediately, Green Thumb appears to have the stronger foundation.

Jeff Siegel has no position in any of the stocks mentioned. The Motley Fool recommends Green Thumb Industries. The Motley Fool has a disclosure policy.