President Trump is expected to sign an executive order as soon as Monday to reclassify marijuana from Schedule I to Schedule III, delivering on a campaign promise while potentially unleashing billions in cannabis investment and ending decades of federal overreach.
Story Highlights
- Trump’s executive order would move marijuana from Schedule I (alongside heroin) to Schedule III (with steroids and codeine)
- Cannabis stocks exploded Friday with Tilray up 44% and Canopy Growth surging 52% on the news
- Reclassification would allow banks to serve cannabis companies and provide significant tax relief
- Move represents Trump fulfilling his August 2025 campaign promise to reform outdated drug policies
Trump Delivers on Cannabis Reform Promise
President Donald Trump is poised to sign an executive order instructing federal agencies to reclassify marijuana as a Schedule III controlled substance, moving it from the most restrictive Schedule I category that includes heroin.
The Washington Post first reported Thursday that Trump would use executive action to implement this significant policy shift, with sources telling CNBC the order could come as early as Monday. This represents a fulfillment of Trump’s August 2025 campaign promise to reform federal cannabis policy.
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
Market Responds with Record-Breaking Gains
Cannabis stocks experienced their best trading day in years Friday as investors celebrated the impending policy change. Major cannabis producers Tilray Brands and Canopy Growth jumped 44% and 52% respectively, while the Amplify Seymour Cannabis ETF rallied more than 54% for its best day on record.
The surge demonstrates Wall Street’s confidence that Trump’s business-friendly approach will unleash investment opportunities previously blocked by federal restrictions and punitive tax policies.
Innovative Industrial Properties, which operates cannabis greenhouse facilities, surged nearly 9% as investors recognized the potential for expanded operations under the new regulatory framework.
Ed Groshans of Compass Point investment bank told clients that “Trump rescheduling marijuana was not an if, in our assessment, but a when,” highlighting the market’s anticipation of this conservative approach to reducing government overreach in state-legal cannabis markets.
Economic Benefits of Reduced Federal Overreach
The reclassification would immediately allow cannabis companies to access traditional banking services and operate under different tax regulations, addressing longstanding barriers to legitimate business operations.
Currently, federal prohibition forces state-legal cannabis businesses to operate as cash-only enterprises, creating security risks and limiting growth potential. Groshans noted the change would be “positive” for the industry by enabling normal banking relationships and encouraging investment in American cannabis companies.
Bill Kirk, senior research analyst at Roth, expects the Drug Enforcement Administration to finalize the reclassification rule by summer if Trump issues the executive order.
This timeline would provide businesses certainty while maintaining appropriate regulatory oversight. The policy change aligns with conservative principles of federalism by reducing federal interference in state-regulated markets while maintaining public safety standards.
Industry Leaders Praise Trump’s Leadership
Cannabis industry executives expressed unprecedented optimism about Trump’s forthcoming action. Tilray CEO Irwin Simon told CNBC he’s “a lot more optimistic than I ever have been,” reflecting confidence in Trump’s ability to cut through bureaucratic delays that have stalled progress for years.
The executive order represents decisive leadership on an issue where previous administrations failed to provide clarity for legal businesses and investors.
Legal experts view the reclassification as dismantling nearly a century of outdated federal drug policies that contradict scientific evidence and state-level reforms. Shawn Hauser of Vicente LLP called it “the beginning of a new era of public health policy” that prioritizes evidence-based approaches over bureaucratic inertia.
While advocates note this represents only a partial victory requiring continued congressional action, Trump’s executive leadership provides momentum for comprehensive reform that respects both public safety and individual liberty.
