Cannabis stocks surged Friday following reports that President Donald Trump plans to significantly ease federal restrictions on marijuana, boosting optimism across the industry. Tilray Brands and Canopy Growth rose more than 44% and 52%, respectively, while cannabis real estate firm Innovative Industrial Properties gained nearly 9%. The Amplify Seymour Cannabis ETF (CNBS) jumped over 54%, marking its strongest day on record.
Sources familiar with the matter said Trump could issue an executive order as early as Monday to reclassify marijuana from a Schedule I drug—alongside heroin—to a less-restricted Schedule III category, which includes substances such as steroids and codeine-containing painkillers. The reclassification would affect tax treatment for cannabis companies and could attract broader investment.
The Washington Post first reported Thursday that Trump plans to direct federal agencies to implement the change, with Axios noting the reclassification could take effect early next year. Trump had previously hinted at the move in August, with industry observers seeing it as inevitable.
Investment experts welcomed the development. Ed Groshans of Compass Point called it “positive” for the sector, predicting the Drug Enforcement Administration could finalize a rule by summer. Bill Kirk, senior analyst at Roth, noted that pending Supreme Court decisions on state cannabis laws could accelerate regulatory action.
Industry leaders expressed cautious optimism. Tilray CEO Irwin Simon said, “I’m a lot more optimistic than I ever have been,” while cannabis attorney Shawn Hauser described the reclassification as a “partial victory,” stressing that broader legalization and regulatory reform remain necessary. 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 If implemented, it dismantles nearly a century of outdated drug policies.”
Cannabis stocks have struggled since pre-pandemic market highs, with Tilray shares recently trading just over $10, far below their September 2018 peak of more than $2,140, adjusted for splits. Analysts say Trump’s expected executive order could mark a turning point for the industry, reshaping federal drug policy, attracting investment, and gradually normalizing marijuana under national law.
