December 16, 2025
By adminThe U.S. cannabis industry may be on the brink of its most significant regulatory shift in decades.
According to a CNBC report, President Donald Trump is expected to sign an executive order as soon as Monday to reclassify marijuana under federal law, potentially moving it from Schedule I to Schedule III of the Controlled Substances Act. The news immediately ignited markets, sending cannabis stocks sharply higher and reviving optimism across an industry that has struggled for years under regulatory uncertainty.
What Does Marijuana Reclassification Mean?
Currently, marijuana is classified as a Schedule I drug, placing it in the same category as heroin — defined as having no accepted medical use and a high potential for abuse.
A move to Schedule III would:
Acknowledge marijuana’s medical value
Reduce federal restrictions
Allow cannabis businesses to access normal tax treatment
Enable banks and financial institutions to legally serve cannabis companies
Encourage broader institutional investment
While reclassification would not equal full legalization, it would represent a major policy shift toward normalization.
Cannabis Stocks Explode on the News
Markets reacted instantly to the report:
Tilray Brands (TLRY) surged more than 44%
Canopy Growth (CGC) jumped over 52%
Innovative Industrial Properties (IIPR) rose nearly 9%
Amplify Seymour Cannabis ETF (CNBS) skyrocketed 54%, marking its best day ever
These gains reflect renewed investor confidence that federal reform may finally translate into real economic benefits for the sector.
Why This Is a Big Deal for the Industry
For years, cannabis companies have faced:
Limited access to banking
Punitive tax rules under IRS Code 280E
Restricted capital markets participation
Regulatory uncertainty across state and federal lines
Reclassification could remove some of the biggest structural barriers, especially around taxation and financial services.
As Ed Groshans of Compass Point noted, the question was never if marijuana would be rescheduled — only when.
What Happens Next?
If Trump signs the executive order:
Federal agencies would be instructed to begin the reclassification process
The DEA could finalize a new rule by summer
Banks may gain clarity on servicing cannabis businesses
Investor capital could flow back into the space
There’s also growing attention on a potential Supreme Court case that may address conflicts between state legalization and federal prohibition — a ruling that could further accelerate reform.
Industry Leaders React
Tilray CEO Irwin Simon called this moment unprecedented:
“I’m a lot more optimistic than I ever have been.”
Legal experts, however, caution that this is only a partial victory.
Shawn Hauser of Vicente LLP emphasized that reclassification alone doesn’t resolve issues like:
Nationwide legalization
Criminal justice reform
Interstate commerce
Uniform safety regulations
Still, she described the move as the beginning of a new era in U.S. drug policy.
A Long Road Back for Cannabis Stocks
Despite Friday’s rally, cannabis stocks remain far below their historical highs.
Tilray, for example, once traded above $2,000 per share (split-adjusted) in 2018 and has since spent years under pressure. The sector’s struggles post-Covid make this rally notable — not just as a short-term spike, but as a potential inflection point.
Final Thoughts: A Turning Point or Just a Trade?
Trump’s expected executive order could mark the most meaningful federal cannabis reform in nearly a century. While full legalization remains a political battle, reclassification alone could:
Improve profitability
Unlock institutional capital
Stabilize long-term growth prospects
For investors, this moment raises an important question:
Is this just another cannabis rally — or the start of a sustained recovery?
Either way, the marijuana sector is back on Wall Street’s radar.
Ref: https://www.cnbc.com/2025/12/12/cannabis-stocks-trump-regulations.html