Investors are closely watching the US cannabis space after President Donald Trump signaled plans to reschedule marijuana, a move that is expected to unlock near-term financial relief and longer-term growth for the industry.
Trump recently stated that his administration will “be moving forward soon with rescheduling marijuana,” referring to its reclassification as a lower-risk Schedule III drug. It is currently classified in Schedule I alongside heroin, ecstasy (MDMA) and LSD.
Shares of the AdvisorShares Pure US Cannabis ETF, which tracks US cannabis firms, have added more than 75% in the past month on renewed rescheduling optimism.
While legalization remains off the table, rescheduling marijuana would signal "a meaningful change in the federal stance that could accelerate broader reform,” Jefferies analysts wrote.
The reclassification would provide immediate financial relief to cannabis businesses by allowing them to deduct ordinary expenses under IRS Code 280E, reducing the punishing tax rates that have long weighed on profitability.
It would also represent federal acknowledgment of marijuana’s medical uses, even as it stops short of nationwide legalization or resolving challenges around banking and interstate commerce.
Congress is simultaneously advancing multiple bills, from banking protections to measures that would formalize medical access and permit interstate trade, and Jefferies believes Trump’s support could help shift the political balance.
“Trump’s endorsement could sway lawmakers who have historically been resistant to reform,” the analysts wrote, pointing to Pew Research data showing that 87% of Americans now support legalization of either medical or recreational use.
The reclassification of cannabis could also change the broader consumer landscape. “Cannabis reclassification poses another headwind to alcohol companies, particularly those without existing exposure, given stolen consumption occasions and cannabis skew to younger consumers,” Jefferies wrote.
Constellation Brands Inc (NYSE:STZ) and Molson Coors Beverage Co (NYSE:TAP) appear most exposed, while Boston Beer has some insulation via its TeaPot and Emerald Hour products.
Among industry players, Jefferies sees Tilray Brands (NASDAQ:TLRY) as best positioned. The company’s leading share of US craft beer strengthens cash flow and provides flexibility for strategic acquisitions, while its cannabis portfolio stands to gain directly from regulatory progress.
“The US is getting closer to becoming a much larger opportunity,” Jefferies noted, raising its price target on Tilray to $2 from $1.50, based on a fiscal year 2027 EBITDA estimate of $89 million.