stocks surge after report of Trump wanting to loosen regulations

Trump expected to tell agencies to reclassify marijuana from Schedule I drug to Schedule III, The Washington Post reported on Thursday. Such a move would allow cannabis companies to fall under different tax regulations and encourage investment.

axios reported The reclassification, which would move marijuana away from a group that includes heroin and into a lower tier with less dangerous drugs like steroids and codeine-containing Tylenol, will happen early next year.

Trump previously made a change to the classification of weed in August.

““Trump rescheduling marijuana is a when, not a if, in our assessment,” Ed Groshans of Compass Point, a midsize investment bank, wrote in a note to clients Friday.

Groshans said the reported change would be “positive” for the cannabis industry. He said banks should catalyze the allocation of funds to serve the sector and give states the ability to regulate this sector.

If Trump orders weed rescheduled in January, Groshans estimates the Drug Enforcement Administration will finalize a proposed rule for reclassification by the summer.

Bill Kirk, Roth’s senior research analyst, said he is also watching to see whether the Supreme Court decides next week to hear a case about state regulations and the federal ban on marijuana. In this case, a positive decision for the industry could accelerate regulatory timelines.

Despite marijuana gaining wider acceptance and easier state classifications, marijuana stocks have struggled since many went public nearly seven years ago.

Tilray shares were down 36% this year before Friday’s move. The Amplify Cannabis ETF is still on track to lose more than 8% in 2025, marking its fifth consecutive negative year.