What it means for seniors, research, stocks

President Donald Trump is expected to sign an executive order this week that will greatly expand access to marijuana. The changes will have major consequences for both consumers and the healthcare industry, industry advocates, executives and researchers told CNBC.

Trump said Monday he was “strongly considering” an executive order that would reclassify marijuana as a Schedule III drug under the Drug Enforcement Administration; The order would place marijuana alongside codeine-containing Tylenol rather than Schedule I like heroin and LSD as it is currently classified. The decision would also allow a pilot program to allow Medicare to cover marijuana products for seniors.

The proposal is expected to apply specifically to cannabidiol products, known as CBD, that aim to treat chronic pain, sleep deprivation and other age-related conditions, said Shawn Hauser, a partner at marijuana-focused law firm Vicente LLP.

CBD has grown in popularity in recent years, moving into the mainstream through canned cocktails and body lotions, but it has yet to receive full support from federal drug regulators.

“I expect the executive order to clearly state what types of cannabinoids are covered and that they must come from a federally legal source,” Hauser told CNBC.

While many in the marijuana industry view the move to Schedule III as a done deal, the inclusion of a controversial Medicare provision adds an extra wrinkle that could result in marijuana-derived products being introduced into the U.S. health care system despite limited clinical evidence of their effectiveness, some experts told CNBC.

Insiders like Hauser are awaiting the final order that will define legal cannabinoids, administrative methods and a framework for Food and Drug Administration oversight.

“A lot of people want to see this, the reclassification, because it leads to a tremendous amount of research that can’t be done unless you reclassify,” Trump told reporters Monday. he said. “That’s why we’re looking at this very strongly.”

Replacing and Medicare coverage are likely to spur new investment from institutional capital and investors who typically pursue federal insurance coverage to big pharmaceutical companies, founder and chief investment officer Timothy Seymour said. Seymour Asset Management and a CNBC contributor.

“The valuation of the sector will be much more valuable because institutional investors will be allowed, they will have access, they will have liquidity, and exchanges will trade them,” Seymour told CNBC. “This could immediately double or triple the industry.”

The push for reclassification comes as a 2024 report found that more Americans reported using marijuana every day or nearly every day than those who reported drinking alcohol with the same frequency. The daily use share shifted in favor of cannabis for the first time. analysis 40 years of data from Carnegie Mellon University.

Medicare initiative backed by billionaire Howard Kesslerfinancier and long-time Trump ally who founded Commonwealth Project The organization says it advocates for elder care, including the use of marijuana.

Advocates like Kessler and Hauser have urged the administration to bypass typical FDA hurdles, such as years of clinical trials, and use a pilot program to collect real-world data on the safety and outcomes of cannabinoids in the elderly population.

Kessler did not respond to a request for comment. The White House also did not respond to a request for comment.

Shares of marijuana companies rose in September on optimism that it would soon come online after Trump shared the Commonwealth Project video. Real Social He branded CBD coverage as “the most important senior health initiative of the century.”

But the Medicare proposal has faced scrutiny even from other Trump allies.

House Speaker Mike Johnson, R-La., expressed concerns about the cost and liability of such a program, primarily to the Washington Post reportedFDA officials argue that reimbursing Americans for treatments that are not approved by the agency would be unprecedented.

Beyond politics, the scientific status of medical marijuana remains controversial.

So far the FDA has only approved CBD-based drug Epidiolex to treat rare types of epilepsy. This narrow approval reflects both regulators’ caution and the fact that high-quality clinical trials are still limited for most other conditions where marijuana is promoted.

Critics warn that the Medicare pilot program could endanger seniors, a demographic group that often takes multiple daily medications. A. New study funded by FDA suggested that long-term CBD use may cause liver toxicity and interact with other life-saving medications.

“It’s not based on science at all. It’s all based on money, and that’s terrible. That’s not how we make medical decisions,” Meg Haney said. manager Dr. from Columbia University Cannabis Research Laboratory. “[Kessler]”A friend of the president… can make a lot of money selling something that has no evidence behind it.”

Other research completely cast doubt on the effectiveness of marijuana and suggested that may not be effective Haney for many of the conditions targeted by the proposed pilot.

For example, a 2023 review Across 134 studies involving adults ages 50 and older, medical marijuana was found to have inconsistent results in improving conditions such as end-stage cancer and dementia. The review also found more frequent links to harm such as depression, anxiety, cognitive impairment and injury.

But rescheduling marijuana would ease barriers to conducting clinical trials that experts say have historically hindered scientific research.

“Medical research is effectively on lockdown,” said Ryan Vandrey, a Johns Hopkins University professor who helps run the Cannabis Science Laboratory. “Plan I makes large, placebo-controlled trials incredibly difficult. Without this data, policymakers are being asked to make decisions in the dark.”

The re-planning will improve growers’ access to banking and financial services because certain IRS tax Restrictions that prevent cannabis businesses from deducting standard expenses.

The economic backdrop is already changing: The annual value of US marijuana production increased by 40% last year compared to the previous year, based on To the Ministry of Agriculture. The global market for hemp-derived products is expected to reach $160 billion by 2032. Grand View Research.

Rumors of rescheduling and a possible pilot program helped shares of weed producers Tilray Brands and Canopy Growth soar 44% and 52%, respectively, on Friday.

As Seymour describes it, Medicare coverage and federal insurance participation are the “holy grail” that can unlock corporate capital.

A Schedule III classification could also help legitimize the industry for institutional investors hesitant to get into it, paving the way for more stocks to list on the New York Stock Exchange and Nasdaq, and shifting valuations from retail sentiment to underlying cash flows.

“Schedule I classification has left many institutional investors behind,” Seymour said. “To have to go out and tell their shareholders that they own a company that is selling the equivalent of heroin, LSD or cocaine is a hard thing to accept.”

If marijuana moves to a reimbursable prescription drug model or federal legality, the category could attract interest from major pharmaceutical companies and distribution could eventually shift from state-licensed dispensaries to national pharmacy chains. CVS And walgreens.