President Trump is poised to deliver a massive victory for states’ rights and economic freedom by reclassifying marijuana from the federal government’s most restrictive drug category, triggering explosive gains in cannabis stocks and signaling an end to decades of federal overreach.
Story Highlights
- Trump expected to sign executive order Monday reclassifying marijuana from Schedule I to Schedule III
- Cannabis stocks surge with Tilray up 44% and Canopy Growth jumping 52% on the news
- Reclassification would remove marijuana from same category as heroin, allowing better banking and tax treatment
- Move represents significant victory for states’ rights advocates who’ve fought federal prohibition
Trump Delivers on Campaign Promise with Executive Action
President Trump is expected to sign an executive order as early as Monday, instructing federal agencies to reclassify marijuana as a Schedule III controlled substance, moving it out of the most restrictive Schedule I category that includes heroin.
This decisive action fulfills promises Trump made during his campaign and represents a major shift away from the heavy-handed federal prohibition that has stifled legitimate businesses and state-level reforms for decades.
Trump expected to sign executive order to reclassify marijuana as soon as Monday, source tells CNBC; pot stocks surge
/position+ $MSOS 🇺🇸🌿https://t.co/Bra5IC45rv pic.twitter.com/72wIorjOcd
— Todd Harrison (@todd_harrison) December 12, 2025
Markets Respond with Record-Breaking Gains
Cannabis stocks exploded on Friday following reports of Trump’s imminent executive order, with major players posting extraordinary gains. Tilray Brands surged more than 44% while Canopy Growth jumped 52%, demonstrating investor confidence in Trump’s business-friendly approach.
The Amplify Seymour Cannabis ETF rallied over 54% for its best day on record, while Innovative Industrial Properties climbed nearly 9%. These dramatic moves reflect market optimism about reduced regulatory burden and improved access to traditional banking services.
Rescheduling Opens Door for Banking and Investment
The proposed reclassification would move marijuana into the same category as steroids and Tylenol with codeine, dramatically reducing regulatory barriers that have prevented legitimate cannabis businesses from accessing basic banking services.
Ed Groshans of Compass Point investment bank called the change “positive” for the industry, noting it would allow banks to serve the sector without fear of federal prosecution. This represents a common-sense approach that recognizes the difference between dangerous narcotics and a substance that many states have already legalized.
States’ Rights Victory Against Federal Overreach
Trump’s action vindicates the principle that states should have the authority to regulate substances within their borders without excessive federal interference.
Currently, 38 states have legalized medical marijuana while 24 states permit recreational use, creating a patchwork of conflicting federal and state laws that has harmed businesses and consumers alike.
The Drug Enforcement Administration is expected to finalize the reclassification by summer, ending nearly a century of prohibition policies that industry experts say “fly in the face of science and medicine.”
Industry Poised for Long-Awaited Recovery
Cannabis stocks have struggled significantly since their pre-COVID peak, with Tilray shares trading around $10 compared to their split-adjusted high of over $2,140 in September 2018. Industry leaders express renewed optimism about the sector’s prospects under Trump’s pragmatic approach.
Tilray CEO Irwin Simon told CNBC he’s “a lot more optimistic than I ever have been,” while legal experts see this as the beginning of broader regulatory reforms that could include criminal justice improvements and enhanced patient access.
