Cannabis stocks surge on report Trump seeks to ease restrictions

Reports that President Trump plans to direct agencies to reclassify marijuana from Schedule I to Schedule III triggered a sharp rally in U.S.-listed cannabis stocks on Friday—Tilray jumped about 35% while other names and ETFs rose roughly 20–31%—on expectations of dramatically loosened federal oversight. Analysts said reclassification would open the door for pharmaceutical approvals, easier banking and institutional funding, lower regulatory/tax burdens and potential uplisting of plant-touching companies, while noting the change still requires DEA review after HHS recommended Schedule III.

Analysis

President Trump is reported to be expected to direct agencies to reclassify marijuana from Schedule I to Schedule III, triggering a sharp, intraday rally in U.S.-listed cannabis equities on Friday. Tilray Brands was the standout mover, gaining about 35% in early trading (table print shows TLRY 11.13, +2.70, +32.08%), SNDL rose ~20% (2.13, +0.36, +20.34%), and sector ETFs WEED and MSOS climbed roughly 31.0% and 32.7%, respectively.

Analysts framed reclassification as a structural catalyst: TD Cowen’s Jaret Seiberg said it would open the door for pharmaceutical approvals and dispensing like other prescription drugs, while Alliance Global Partners’ Aaron Grey highlighted likely follow-on catalysts including additional state legalization, safer banking and uplisting of plant-touching stocks. The article emphasizes funding as a current constraint—federal restrictions keep most banks and institutional investors out and force costlier financing.

Regulatory execution remains the key risk: HHS recommended a Schedule III move last year but the Drug Enforcement Administration must review and decide, so timing and implementation (tax treatment, banking rules, exchange uplisting) are uncertain. The market reaction reflects optimism about lower oversight and easier capital access, but investors should expect event-driven volatility until the DEA and related rulemaking provide definitive outcomes.

Key Decisions for Investors

• Consider tactical, size-limited exposure to U.S.-listed cannabis ETFs and larger-cap plant-touching names (for example TLRY, CGC, MSOS, WEED) to capture a potential re-rating, but keep positions modest given regulatory execution risk
• Use protective hedges or disciplined stop-losses ahead of the DEA review and any formal rulemaking because the timing and final decision remain uncertain
• Monitor three high‑impact indicators—DEA decision on the HHS recommendation, any White House implementation guidance, and legislative/banking developments—and only materially add risk on confirmed, favorable progress
• Avoid chasing the initial spike; prefer establishing or adding to positions on post-news consolidation or pullbacks to reduce the risk of froth-driven losses