High Tide Sees a Clear Path to U.S. Growth as Washington Rewrites CBD Rules

Executive summary and immediate market signal

High Tide (HITI) has framed this week’s federal action on cannabis as a game-changer for its U.S. business. The White House order to reschedule cannabis and to let Medicare cover some FDA-approved cannabidiol (CBD) drugs opens two different doors: one broad and political, the other narrow and commercial. Investors should read this as a bullish signal for firms already selling legal CBD products and building distribution in the United States—companies like High Tide stand to gain faster market access and a clearer path to sell into older, insured customers. That said, the benefits will roll in over quarters, not overnight.

How markets are likely to price the policy shift

The headlines will lift sentiment across cannabis stocks: rescheduling reduces legal uncertainty, and Medicare coverage for CBD whispers of a bigger addressable market. For public companies with U.S. brands and manufacturing — the kind that can supply standardized, tested CBD at scale — stocks should see a re-rating over the next year as investors bake in faster growth. Expect a two-stage market reaction.

First, a near-term pop based on reduced legal risk. Many cannabis names trade at discounts tied to regulatory fear. A credible federal pivot removes a large tail risk and can push multiples higher, especially for operators with clean track records and audited supply chains.

Second, a longer re-rating tied to revenue visibility. Medicare reimbursement is meaningful only if companies can get products approved, listed with payers or put on formularies, and if distribution chains handle the volume. Stocks that show contracts with pharmacies, wholesalers, or pharmacy benefit managers will outperform those that merely sell hemp-derived over-the-counter products. The market will prefer clear, executable U.S. strategies over vague international ambitions.

High Tide’s plan: licensing in the U.S., NuLeaf Naturals and FAB CBD moves

High Tide is pushing three fronts. First, it is seeking U.S. licensing and state-by-state pathways to operate retail and distribution where allowed. That gives the company local retail footprints and logistic control—useful if demand from older consumers grows.

Second, NuLeaf Naturals, a High Tide brand focused on full-spectrum CBD oils and vape-free products, is central to a Medicare play. NuLeaf’s manufacturing and product testing can be adapted to tighter regulatory standards. High Tide is positioning NuLeaf to meet the kinds of documentation and quality controls that Medicare and large insurers will require.

Third, FAB CBD—acquired as a direct-to-consumer brand—gives High Tide consumer reach and marketing capability. If FAB can be reformulated or relabeled to align with FDA guidance and insurer requirements, the company could pivot some DTC sales into medical channels or pharmacy listings, which carry higher volumes but lower per-unit margins.

Near-term catalysts for High Tide include: progress on state licenses, any FDA communications about product standards, formal discussions with Medicare administrators or insurers, and quarterly results that show U.S. revenue acceleration. Each item will affect valuation more than general policy noise.

What the executive order actually changes and the likely timelines

Rescheduling means cannabis moves out of the strictest federal category and becomes easier for research, banking and interstate commerce — depending on implementing rules. It does not instantly legalize recreational cannabis across the U.S., but it removes many federal obstacles that have stymied business growth and investment.

Medicare reimbursement for CBD products will almost certainly be limited at first to FDA-approved formulations and uses with demonstrated clinical benefit. That process requires manufacturers to supply clinical data, labeling controls and manufacturing audits. Expect a phased rollout: guidance in months, formal listing processes over the next year, and broader coverage decisions taking one to two years. In short: good policy steps now, but real commercial benefits will appear over multiple quarters.

Revenue and valuation scenarios: what upside looks like

To keep this practical, consider two simple scenarios for High Tide’s U.S. CBD channel over three years. In a conservative scenario, market access improves but adoption among older patients is gradual; High Tide converts a small share of online and retail CBD buyers to medically oriented channels, lifting annual U.S. CBD revenue by a mid-single-digit percentage of current company sales. That outcome supports a modest multiple expansion as investors reward lower regulatory risk.

In an optimistic scenario, High Tide secures regional pharmacy listings and captures a meaningful share of insured CBD use where Medicare applies. If that pushes U.S. CBD revenue materially higher — say, doubling the current U.S. channel contribution — the company’s top line could grow enough to justify a strong re-rating versus peers. Margins would compress somewhat in pharmacy channels, but volume and predictability would improve cash flow and attract a different class of investors.

Which outcome matters most is execution: licensing speed, product compliance, and the ability to negotiate with payers. The valuation swing is therefore wide; investors should expect high sensitivity to news flow rather than stable linear growth assumptions.

Key risks, timing uncertainties and what shareholders should watch

Major risks are regulatory details, FDA requirements, and the practicalities of getting onto Medicare or insurer lists. Rescheduling does not erase state-by-state restrictions or supply-chain bottlenecks. Execution risks include reformulation needs, extra testing costs, and potentially lower margins in reimbursed channels.

Near-term milestones to track: state license approvals, FDA correspondence about product claims or testing, public announcements of pharmacy or wholesaler agreements, and quarterly U.S. revenue trends that show sustained growth. Also watch for competitor moves; firms that secure early pharmacy distribution will set pricing benchmarks that shape market profitability for everyone.

Bottom line: High Tide is positioned to be a clear beneficiary of this policy shift, but the path to meaningful Medicare-driven revenue is long and conditional. Investors should reward progress in licensing, quality controls and formal payer relationships — not policy headlines alone.

Sources

• prnewswire.com