On December 12, 2025, reports surfaced that President Donald Trump is expected to direct U.S. agencies to reclassify marijuana from a Schedule I to a Schedule III drug. This potential change could significantly reduce federal oversight of marijuana, aligning its regulatory status with certain common prescription medications.
Following the announcement, shares of various cannabis companies saw notable increases. For instance, Tilray Brands experienced a 35% jump, while other companies such as SNDL and Canopy Growth reported gains between 20% and 31%. Analysts suggest that reclassifying marijuana could facilitate the approval of more cannabis-based products by pharmaceutical companies, allowing these products to be dispensed like other prescription drugs.
Currently classified as a Schedule I substance under the Controlled Substances Act, marijuana is deemed to have a high potential for abuse and no accepted medical use. The anticipated reclassification could ease criminal penalties associated with marijuana and potentially lower taxes, making it easier for producers to secure funding. The cannabis industry has faced significant financial challenges due to these federal restrictions, which limit access to traditional banking services.
Additionally, analysts indicate that this move may catalyze further state-level legalization efforts, enhance banking safety for cannabis businesses, and pave the way for cannabis stocks to be listed on major U.S. exchanges. This development follows a previous recommendation from the Biden administration’s Department of Health and Human Services to review marijuana's classification, which also favored moving it to Schedule III. The final decision on the reclassification will depend on the Drug Enforcement Administration's review of these recommendations.