Cannabis Stocks Rally 40% After Trump Considers Drug Reclassification
Canopy Growth Corp
Cronos Group Inc
Greenlane Holdings Inc
AdvisorShares Pure US Cannabis ETF
Tilray Brands Inc
TradingKey - Cannabis stocks soared after President Donald Trump announced on Monday that he is considering reclassifying cannabis to a less-dangerous drug classification, with a decision expected in the coming weeks.
Tilray Brands (TLRY) led the charge with a 42% increase, Canopy Growth (CGC) surged more than 26%, Greenlane (GNLN) jumped 23%, and Cronos Group (CRON) rose over 16% to achieve a 52-week high. The AdvisorShares Pure US Cannabis ETF (MSOS.US) also saw its stock price climb by 25.67%.
The rally continued in pre-market trading on Tuesday, with Tilray Brands up 14% and Canopy Growth rising 8.6% at the time of reporting.
The Wall Street Journal reported that Trump had received political contributions from cannabis companies. Recently, he hosted a fundraiser at his New Jersey golf club, attended by Kim Rivers, CEO of vertically-integrated cannabis firm Trulieve. Rivers advocated for reclassifying cannabis and expanding medical cannabis research. Trulieve's Canadian-listed shares (CNSX: TRUL) surged 36% on Monday.
Tim Seymour, Chief Investment Officer of Seymour Asset Management, noted that reclassifying cannabis would be a "game changer" for the roughly $80 billion market.
Currently classified as a Schedule I drug, cannabis businesses face a heavy tax burden due to federal tax code Section 280E, which prevents Schedule I or II drugs from deducting business expenses like other companies.
Trump's statement suggests a shift to reclassifying cannabis to a less-dangerous category, potentially easing restrictions on buying and selling cannabis products and boosting the industry's profitability.
According to research firm Research and Markets, the U.S. cannabis market is projected to reach $76.39 billion by 2030, with a compound annual growth rate of 11.5% from 2025 to 2030. However, this growth will largely depend on the progress of legalization. Currently, due to unclear prospects for legalization, the cannabis industry's valuations have sunk to low levels.
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