Trump Moves A Step Closer To Reclassifying Marijuana As A Less Dangerous Drug — A Breakout Moment For Weed Industry?

The cannabis industry is enjoying renewed momentum under Trump, whose administration has adopted a notably more accommodative approach toward the drug and its related products.

• President Donald Trump spoke with House Speaker Mike Johnson, Health Secretary Robert F. Kennedy Jr., and CMS chief Mehmet Oz to advance the effort to reclassify marijuana.
• Trump could sign an executive order in this regard early next year, Axios reported.
• The development puts the spotlight back on weed stocks, with Tilray’s shares shooting up by over 30% in Thursday’s after-hours trading.

A pivotal legislation that could supercharge the marijuana industry could soon become a reality. After hinting at reclassifying marijuana as a less dangerous drug in August, President Donald Trump reportedly discussed with lawmakers and industry executives on Wednesday a potential executive order in this regard. 

That sent shares of Tilray Brands, the top producer of cannabis products, beverages, and wellness goods, soaring over 31% in the after-market session and buzzing on Stocktwits, ranking among the top five of the “Trending” list. The Stocktwits sentiment for TLRY shifted to ‘extremely bullish’ (79/100) from ‘neutral’ the previous day.

Other marijuana-linked stocks – such as Curaleaf Holdings, Trulieve Cannabis, Green Thumb Industries, and Innovative Industrial Properties, which do not trade outside of market hours – are likely to move northward on Friday.

Trump Accommodative On Weed

The weed industry is having its moment in the sun with Trump at the helm. His administration has taken an accommodative stance on the drug and its related products, although no material change in federal law has occurred yet. 

Last month, media reports said the Centers for Medicare & Medicaid Services (CMS) is planning an initiative that would make some U.S. Medicare beneficiaries eligible for coverage of cannabidiol (CBD) treatment. Earlier, Trump had posted on social media a video arguing that hemp-derived CBD could be beneficial in senior healthcare.

Marijuana Executive Order 

On Wednesday, Trump reportedly discussed the plan with House Speaker Mike Johnson, a Republican, in a call that also included marijuana industry executives, Health Secretary Robert F. Kennedy Jr., and CMS chief Mehmet Oz.

The president is expected to seek to ease access to the drug through an upcoming executive order that directs federal agencies to pursue reclassification, the Washington Post reported, citing unnamed sources. The move might not legalize or decriminalize marijuana, but it would ease barriers to research, the report said.

Axios reported the executive order could be signed early next year.

Marijuana remains a Schedule I drug under federal law — the same category as heroin and LSD — a classification reserved for substances deemed to have high abuse potential and no accepted medical use.

Trump would move to classify marijuana as a Schedule III substance, indicating that it has a lesser potential for abuse and is allowed for use in specific medical treatments, but can also create risks of physical or psychological dependence.

Other Schedule III drugs include Tylenol with codeine, as well as specific steroid and hormone treatments.

The Jury Is Still Out, Though

The center’s push notwithstanding, doubts over cannabis efficacy in healthcare remain. 

A recent study, funded by the Food and Drug Administration, suggested that prolonged use of CBD may cause liver toxicity. In contrast, other research suggests it can interfere with other medications, harm male reproductive health, and pose potential risks to children and pregnant women.

Meanwhile, a plethora of studies have linked marijuana, whether smoked or eaten, to anxiety, heart disease, and significant cardiovascular risks.

To be sure, the U.S. began allowing limited medical marijuana use in the late 1990s, starting with state-level approvals led by California in 1996. This shift happened after patient groups and doctors pushed for cannabis to help with chronic pain, nausea, and other conditions where traditional treatments fell short.

A recent Pew Center survey showed that nine-in-ten U.S. adults say either that marijuana should be legal for medical and recreational use (54%) or that it should be legal for medical use only (33%). Another 12% say the drug should not be legal at all. These views have held relatively steady over the past six years.

The AdvisorShares Pure US Cannabis ETF (MSOS), which tracks U.S. cannabis companies exclusively, has declined 3.6% this year. The AdvisorShares Pure Cannabis ETF (YOLO), which also tracks overseas companies and cannabis-adjacent businesses, has gained 19.3%.

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