Cannabis stocks rally as Trump 'very strongly' considering reclassifying marijuana
Shares of cannabis companies jumped on Tuesday, December 16, after U.S. President Donald Trump said the White House was “very strongly” considering changing the classification of marijuana to a less dangerous drug, which he claimed would “lead to tremendous amounts of research.”
Details
The White House is “very strongly” considering issuing an executive order to reclassify ("reschedule") marijuana as a less dangerous substance, Trump said on Monday, CNN writes.
“A lot of people want to see it, the reclassification, because it leads to tremendous amounts of research that can’t be done unless you reclassify. So, we are looking at that very strongly,” Trump was quoted as saying.
Those remarks triggered a rally in pot stocks on Tuesday.
Tilray Brands jumped 27.5% to $13.94 per share.
Curaleaf Holdings rose more than 23.0% to $4.53 per share, its highest level since mid-2024, in over-the-counter trading.
Canada's Trulieve Cannabis gained 12.6% to CAD14.50 per share (about $10.50 per share), marking a one-year high.
SNDL climbed nearly 12.0% to $2.15 per share, its highest level since early November.
Canopy Growth advanced 10.2% to $1.83 per share, its best close since late August.
Why reclassification matters
Under current U.S. law, marijuana is classified as a Schedule I substance, alongside heroin and LSD, meaning it is deemed to have a high potential for abuse and no accepted medical use. As a result, its production and distribution are prohibited at the federal level.
The White House is considering moving marijuana to Schedule III, a less restrictive category that includes drugs such as ketamine, testosterone, and products containing a certain amount of codeine, MarketWatch notes. While reclassification would not fully legalize marijuana, it would ease regulatory restrictions and could allow some companies to benefit from tax relief, the Wall Street Journal explains.
Back in August, Trump said that his administration was considering reclassifying pot. At the time, Tilray CEO Irwin Simon told CNBC he expects the process of reclassification to take about a year.
A week ago, the Washington Post reported, citing sources, that Trump was preparing to sign an executive order to "ease access" to marijuana in the U.S.
Pot stocks rallied on both these occasions.
Context
Despite federal restrictions, U.S. states have the authority to legalize marijuana for medical or recreational use. According to a U.S. Centers for Disease Control and Prevention fact sheet last updated February 2024, 47 states, the District of Columbia, and three U.S. territories (Guam, Puerto Rico, and the U.S. Virgin Islands), allow marijuana for medical purposes. Another 24 states, the District of Columbia, and two territories permit adult recreational use.
