Cannabis stocks surged on Friday amid reports that President Donald Trump plans to significantly ease federal restrictions on marijuana, sparking optimism in the industry. Producers Tilray Brands and Canopy Growth jumped more than 44% and 52%, respectively, while cannabis greenhouse operator Innovative Industrial Properties rose nearly 9%. The Amplify Seymour Cannabis ETF (CNBS) rallied over 54%, marking its best day on record.
According to sources familiar with the matter, Trump is expected to issue an executive order as early as Monday to reclassify marijuana from a Schedule I drug, alongside heroin, to a less-regulated Schedule III category, which includes substances such as steroids and Tylenol with codeine. The change would alter the tax treatment of cannabis companies and encourage broader investment in the sector.
The Washington Post first reported Thursday that Trump intends to instruct federal agencies to implement the reclassification, with Axios noting that the move could take effect early next year. Trump had previously floated the idea in August, and industry experts say it was always a question of “when,” not “if.”
Ed Groshans, of investment bank Compass Point, called the move “positive” for the cannabis industry, predicting that the Drug Enforcement Administration would finalise a proposed rule for the reclassification by summer. Bill Kirk, senior research analyst at Roth, highlighted that pending Supreme Court decisions on state regulations and federal cannabis prohibition could accelerate regulatory timelines.
Industry leaders expressed cautious optimism about the potential changes. Tilray CEO Irwin Simon said, “I’m a lot more optimistic than I ever have been,” while Shawn Hauser, partner at cannabis-focused law firm Vicente LLP, described a reclassification as a “partial victory,” noting that broader legalisation and regulatory reform are still needed.
Hauser added, “This is the beginning of a new era of public health policy. If implemented, it dismantles nearly a century of outdated drug policies that fly in the face of science and medicine.”
Cannabis stocks have struggled since the market mania before the COVID-19 pandemic, despite growing acceptance and easing state-level regulations. Tilray shares, for example, recently traded at just over $10, well below their September 2018 peak of more than $2,140, adjusted for splits.
With Trump’s expected executive order, the cannabis industry is eyeing a potential turning point that could reshape federal drug policy, encourage investment, and gradually normalise marijuana under national law.
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