Cannabis stocks surged on Friday on reports that President Donald Trump is considering an executive order to reschedule marijuana at the federal level, potentially moving it from Schedule I to Schedule III.
According to people familiar with the matter, Trump has discussed the proposal with marijuana industry executives, Health and Human Services Secretary Robert F. Kennedy Jr., and Centers for Medicare & Medicaid Services Administrator Mehmet Oz.
The discussions reportedly included a Wednesday call with House Speaker Mike Johnson. Johnson expressed skepticism and cited studies and data opposing rescheduling, while industry executives reportedly countered his points during the call.
No final decisions have been made, a White House official said.
Currently, cannabis is classified as a Schedule I drug under federal law, a category reserved for substances considered to have a high potential for abuse and no accepted medical use, alongside heroin and LSD.
Moving cannabis to Schedule III would place it in the same tier as ketamine, Tylenol with codeine, and anabolic steroids, drugs generally seen as having lower abuse potential.
Rescheduling is expected to ease regulatory and financial constraints for cannabis companies, potentially simplifying access to banking services, reducing tax burdens, and encouraging investment. It could also open new avenues for medical research and patient access to marijuana-based treatments.
Brian Vicente, founding partner of the cannabis law and policy firm Vicente LLP, said rescheduling would have a positive impact on thousands of state-legal business across the US.
“Rescheduling releases cannabis businesses from the crippling tax burden they have been shackled with and allow these businesses to grow and prosper,” Vicente said. “We work with hundreds of licensed cannabis businesses, and the ability to deduct ordinary operating costs under the Schedule III proposal is a game-changer for them."
Shawn Hauser, partner at Vicente LLP, described rescheduling as “the beginning of a new era of public health policy.”
“[It] is a long-overdue acknowledgment of marijuana’s medical value and safety, marking a final repudiation of failed Nixon-era prohibition,” Hauser said. “If implemented, it dismantles nearly a century of outdated drug policies that fly in the face of science and medicine.”
Following the rescheduling reports, the AdvisorShares Pure US Cannabis ETF (NYSEARCA:MSOS) surged 36% while the AdvisorShares Pure Cannabis ETF (NYSEARCA:YOLO) was up almost 28%.
Individual firms also spiked, with Tilray Brands (NASDAQ:TLRY) up 39%, Canopy Growth Corporation (TSX:WEED, NYSE:CGC) added 26%, SNDL (NASDAQ:SNDL) was up 28% and Curaleaf Hldgs Inc. (CSE:CURA, OTCQX:CURLF) added 22%. Aurora Cannabis Inc (TSX:ACB, NASDAQ:ACB) gained 21%, Green Thumb Industries Inc. (CSE:GTII, OTCQX:GTBIF) was up 20%, Trulieve Cannabis Corp. (CSE:TRUL) was up 17% and Cronos Group (NASDAQ:CRON) was up 15%