President Donald Trump told reporters Monday that his administration is seriously weighing whether to issue an executive order reclassifying marijuana as a Schedule III substance, potentially triggering one of the biggest shifts in federal drug policy in decades.
"We are looking at that very strongly," Trump said when asked about reports suggesting he might direct agencies to treat marijuana as a Schedule III drug rather than its current Schedule I classification.
The president went further, pointing to research as a key driver. "A lot of people want to see it — the reclassification — because it leads to tremendous amounts of research that can't be done unless you reclassify," he explained, according to Reuters.
Trump's comments confirmed speculation that began circulating last Friday, when sources indicated the president might move forward with reclassification as soon as Monday. White House officials were quick to note that no final decision has been reached yet, but the momentum appears real.
How the Market Responded
Cannabis stocks had an interesting Monday. After exploding higher on Friday's initial reports, investors decided to cash in some chips. Canopy Growth Corp. (CGC), SNDL Inc. (SNDL), AdvisorShares Pure US Cannabis ETF (MSOS), and Tilray Brands, Inc. (TLRY) had all surged between 30% and 40% on Friday's news, prompting Monday's profit-taking pullback.
The potential reclassification represents more than symbolic progress. Moving marijuana to Schedule III would place it alongside standard pharmaceuticals, dramatically reducing regulatory scrutiny and opening doors that have been firmly shut for years.
For cannabis companies, the implications are tangible. Reclassification could slash tax burdens that have weighed heavily on the industry and improve access to capital that's been maddeningly difficult to secure. Under current federal restrictions, major financial institutions have stayed away from cannabis lending, forcing companies into expensive alternative financing arrangements that strain their balance sheets.
What Happens Next
The process isn't quite as simple as Trump signing a piece of paper, though the executive branch clearly has influence here. The Biden administration previously requested a health agency assessment of marijuana's scheduling, which recommended the Schedule III designation. But ultimately, the Drug Enforcement Administration holds the regulatory authority to make the final call on any scheduling change.
So while Trump can direct and encourage, the DEA needs to pull the trigger. Given the president's public comments and the momentum building around reclassification, though, the cannabis industry has more reason for optimism than it's had in years. Whether that optimism translates into sustained stock rallies or simply sets up another round of volatility remains to be seen.