Focus on the BIG picture.
Saturday, Dec 13, 2025
Outside the box.
Cannabis Stocks Rally as Trump Administration Mulls Reclassifying Marijuana Under Federal Law
Market optimism grips the cannabis sector on reports President Trump may direct federal agencies to lower marijuana’s classification, easing regulatory and financial burdens
U.S. cannabis equities surged Friday as investors reacted to emerging reports that President Donald Trump’s administration is moving toward reclassifying marijuana under federal law, a shift that could significantly reshape the legal and economic landscape for the industry.
Major producers and exchange-traded funds linked to cannabis saw sharp gains amid speculation that the White House will direct agencies to reclassify marijuana from its current Schedule I status to a less restrictive Schedule III designation under the Controlled Substances Act.
Shares of leading cannabis companies such as Tilray Brands and Canopy Growth experienced notable jumps, while sector-focused funds including the AdvisorShares Pure US Cannabis ETF and the Amplify Seymour Cannabis ETF also recorded strong advances.
Market participants interpreted the reports as a sign that federal policy could be realigned to acknowledge medical use and reduce oversight of cannabis, bolstering investor confidence in a sector long constrained by regulatory limitations.
The anticipated reclassification would mark a departure from the current Schedule I classification, which groups marijuana with substances deemed to have high potential for abuse and no accepted medical use.
Moving cannabis to Schedule III could unlock meaningful tax relief for compliant businesses by easing restrictions under Section 280E of the Internal Revenue Code and facilitate improved access to banking services, an area where the industry has faced long-standing federal barriers.
While the White House has not formally announced a final decision, discussions are understood to be advancing within the administration.
President Trump has engaged with senior officials and policy advisers on the issue, with any reclassification requiring a formal regulatory process through the Department of Justice and the Drug Enforcement Administration.
Analysts note that even a limited reclassification would represent a substantial federal acknowledgment of the industry’s legitimacy and economic contribution.
Although broader legalization and interstate commerce would still depend on congressional action, the prospect of regulatory reform has injected fresh momentum into a sector that has operated successfully under state systems while awaiting federal alignment.
Major producers and exchange-traded funds linked to cannabis saw sharp gains amid speculation that the White House will direct agencies to reclassify marijuana from its current Schedule I status to a less restrictive Schedule III designation under the Controlled Substances Act.
Shares of leading cannabis companies such as Tilray Brands and Canopy Growth experienced notable jumps, while sector-focused funds including the AdvisorShares Pure US Cannabis ETF and the Amplify Seymour Cannabis ETF also recorded strong advances.
Market participants interpreted the reports as a sign that federal policy could be realigned to acknowledge medical use and reduce oversight of cannabis, bolstering investor confidence in a sector long constrained by regulatory limitations.
The anticipated reclassification would mark a departure from the current Schedule I classification, which groups marijuana with substances deemed to have high potential for abuse and no accepted medical use.
Moving cannabis to Schedule III could unlock meaningful tax relief for compliant businesses by easing restrictions under Section 280E of the Internal Revenue Code and facilitate improved access to banking services, an area where the industry has faced long-standing federal barriers.
While the White House has not formally announced a final decision, discussions are understood to be advancing within the administration.
President Trump has engaged with senior officials and policy advisers on the issue, with any reclassification requiring a formal regulatory process through the Department of Justice and the Drug Enforcement Administration.
Analysts note that even a limited reclassification would represent a substantial federal acknowledgment of the industry’s legitimacy and economic contribution.
Although broader legalization and interstate commerce would still depend on congressional action, the prospect of regulatory reform has injected fresh momentum into a sector that has operated successfully under state systems while awaiting federal alignment.
