Friday's premarket session delivered some serious green for cannabis stocks, and we're not talking about the product. Tilray Brands (TLRY) rocketed 34.88% higher while Canopy Growth (CGC) wasn't far behind at 27.46%. The catalyst? Reports that President Donald Trump is preparing to shake up federal marijuana regulations in a big way.
The rally extended across the sector. Aurora Cannabis Inc. (ACB) surged 20%, Cronos Group Inc. (CRON) gained 19%, while Organigram Global Inc. (OGI) and SNDL Inc. (SNDL) rose 12% and 34.7% respectively.
The Schedule III Story
Here's what has investors excited: The Washington Post reported Thursday that Trump plans to direct federal agencies to reclassify marijuana as a Schedule III drug. That might sound like bureaucratic alphabet soup, but it's actually a pretty significant shift.
Currently, marijuana sits in Schedule I alongside heroin. That's the "most dangerous, no medical value" category. Moving it to Schedule III would put cannabis in the same regulatory bucket as anabolic steroids and Tylenol with codeine. Schedule III substances are considered to have legitimate medical uses and lower abuse potential.
The practical impact goes straight to the bottom line. Cannabis companies would face different tax regulations under Schedule III, which could make them far more attractive to institutional investors who've been sitting on the sidelines. For context, Trump had previously floated this idea back in August, so this isn't coming completely out of left field. According to Axios, the change could happen early next year.
The White House hasn't commented on the reports yet.
Trump's Cannabis Market Influence
This isn't Trump's first rodeo moving cannabis markets. Back in September, he sparked a rally with a pro-CBD post on Truth Social. He shared a video from The Commonwealth Project touting the health benefits of cannabis and arguing that Medicare should cover CBD, calling it "the most important senior health initiative of the century." Markets responded enthusiastically.
But the regulatory landscape remains messy. Just last month, Congress threw a wrench into things with a last-minute deal that re-criminalized certain THC products that had been legalized under the 2018 Farm Bill. The issue stems from how hemp was defined in 2018: cannabis containing under 0.3% delta-9 THC was legalized. Producers got creative, though, making products that technically met the delta-9 limit but exceeded 0.3% total THC. The result was intoxicating products that existed in a legal gray area. Congress's 2025 action aimed to close that loophole.
The bottom line for investors: cannabis regulation remains fluid, and Trump's moves continue to be a major market catalyst. Whether the Schedule III reclassification actually happens and what the full implications might be remains to be seen, but Friday's market action shows just how much anticipation is baked into these potential changes.