President Donald Trump appears ready to make good on a campaign promise that could reshape the cannabis industry without actually legalizing marijuana nationwide. According to reports, Trump is preparing to sign an executive order that would move cannabis from Schedule I to Schedule III under the Controlled Substances Act, a technical change with potentially massive practical implications.
Trump gave the clearest signal yet earlier this week when he told reporters that reclassification was being considered "very strongly." Speaking from the Oval Office, he explained to CNN that the current Schedule I designation creates significant barriers for researchers who want to study marijuana's medical applications. Moving it down the scheduling ladder, he suggested, could unlock scientific progress that federal law currently blocks.
Understanding the Scheduling Shift
The difference between Schedule I and Schedule III matters more than you might think. The Drug Enforcement Administration defines Schedule I drugs as substances with no accepted medical use and a high potential for abuse. That's the category marijuana currently shares with heroin and LSD. Schedule III substances, by contrast, are considered to have moderate to low risk of physical and psychological dependence. Think ketamine or certain anabolic steroids.
Rescheduling wouldn't mean cannabis becomes legal at the federal level. Instead, the change would primarily impact taxation rules, research approvals, adult access to tested and regulated products, and give states more flexibility to implement their own legalization frameworks without as much federal interference.
From Campaign Promise to Policy Action
Trump laid out his position during the 2024 presidential campaign, posting on TruthSocial in September 2024 that the issue went beyond simple legalization. "We must also implement smart regulations, while providing access for adults, to safe, tested product," Trump wrote. "As President, we will continue to focus on research to unlock the medical uses of marijuana to a Schedule 3 drug, and work with Congress to pass common sense laws, including safe banking for state authorized companies, and supporting states rights to pass marijuana laws, like in Florida, that work so well for their citizens."
That statement telegraphed exactly what the anticipated executive order appears designed to accomplish: not federal legalization, but a framework that makes it easier for states to manage their own cannabis markets while addressing some of the thorniest problems facing legitimate cannabis businesses, particularly around banking and taxation.
Stocks to Watch
Investors tracking the cannabis sector have their eyes on several publicly traded companies that could see significant impact from rescheduling. The list includes Canopy Growth Corporation (CGC), Tilray Brands Inc. (TLRY), Akanda Corp (AKAN), Aurora Cannabis Inc (ACB), Cronos Group Inc (CRON), Flora Growth Corp (FLGC), GrowGeneration Corp (GRWG), IM Cannabis Corp (IMCC), Organigram Global Inc (OGI), SNDL Inc (SNDL), urban-gro, Inc. (UGRO), and cbdMD, Inc. (YCBD).
These companies operate across different segments of the cannabis ecosystem, from cultivation and retail to ancillary services like hydroponic equipment and CBD products. A shift to Schedule III could improve their access to traditional banking services, reduce their tax burdens under Section 280E of the tax code, and potentially open up new capital markets that have remained largely closed to cannabis businesses under current federal restrictions.
The timing of any executive order remains unclear, but Trump's recent comments suggest the administration is moving toward action rather than just consideration. For an industry that has operated in a legal gray zone for years, watching state-level legalization advance while federal classification remained stuck in place, the potential change represents a significant policy evolution even if it stops short of full legalization.