President Donald Trump is reportedly preparing to sign an executive order that would direct federal agencies to reclassify marijuana from a Schedule I controlled substance to Schedule III under the Controlled Substances Act — a change that could represent the most significant shift in U.S. cannabis policy in over 50 years.
Under current law, marijuana is listed alongside drugs such as heroin and LSD, deemed to have no accepted medical use and a high potential for abuse. A Schedule III designation, by contrast, places marijuana in the same category as certain prescription pain medications and steroids. These drugs are recognized for medical use and carry lower abuse potential.
📈 Market Reaction: Stocks Soar on Rumors
Cannabis investors responded immediately to the news. Shares of major pot stocks soared Friday after the Reuters and Washington Post reports broke. Tilray Brands, SNDL, Canopy Growth, and the AdvisorShares Pure US Cannabis ETF all saw double-digit gains, with premarket rallies ranging between roughly 13.5% and 32.5%.
Analysts say this surge reflects optimism that rescheduling could open financial doors long closed to the industry. These include access to mainstream banking services, reduced tax burdens, and potentially wider institutional investment.
🧠 What Rescheduling Actually Means
Reclassifying marijuana wouldn’t legalize it federally or erase state laws, but it would dramatically alter the federal regulatory landscape. Cannabis companies would no longer be treated like providers of Schedule I drugs. This classification currently disallows many tax deductions under Internal Revenue Code Section 280E and limits access to traditional banking.
Medical research could also benefit. Schedule III classification would ease hurdles for clinical studies and potentially attract more research funding, which advocates say could validate medical benefits for conditions from chronic pain to PTSD.
The industry’s response to these long-standing restrictions helps explain why U.S. cannabis operators have continued to adapt and survive despite federal barriers, a trend explored further in our analysis of cannabis industry resilience amid ongoing regulatory uncertainty.
🧩 Federal vs. State Laws: Still Complicated
Even if Trump signs the order as soon as Monday, the change would not automatically legalize recreational cannabis nationwide. Federal rescheduling merely adjusts how the federal government categorizes the drug. Legality and distribution would still depend on state laws, where 24 states allow recreational use and 40 allow medical cannabis.
Critics caution that while rescheduling brings massive regulatory relief, it could also trigger stricter controls or FDA involvement for medical products and leave loopholes unresolved, especially at the nexus of hemp and cannabis definitions.
🧑⚖️ Policy Significance
Many experts are calling this move the biggest federal cannabis policy change since the drug was placed in Schedule I in 1970. If enacted, it could ease federal oversight, improve banking and tax landscapes, and drive a new phase of legitimation for cannabis companies — potentially boosting industry growth long term.
Political and legal challenges may still emerge, but for now, the cannabis sector is energized by the promise of a new era in federal policy.
Published On: December 13, 2025
Source: CNBC
Cannabis stocks surge as Trump signals regulatory shift
https://www.cnbc.com/2025/12/12/cannabis-stocks-trump-regulations.html