Cannabis stocks jumped Wednesday after reports that President Donald Trump is preparing to formally reclassify marijuana, a move that would carry major consequences for the industry's access to banking services and medical research funding.
Tilray Brands was among the biggest movers, along with other cannabis producers that have long been constrained by the drug's federal Schedule I classification. That designation, which groups marijuana alongside heroin and LSD, has blocked cannabis companies from using standard banking services and made federally funded medical research on the substance nearly impossible.
The expected reclassification follows an executive order Trump signed in December directing a review of marijuana's federal status. Rescheduling to a lower classification, likely Schedule III, would not legalize recreational marijuana at the federal level but would significantly ease the regulatory burden on growers, dispensaries, and researchers.
Access to banking has been one of the cannabis industry's most persistent problems. Without it, many operators have been forced to run cash-heavy businesses, creating security risks and complicating payroll, taxes, and vendor payments. A reclassification would allow cannabis companies to open standard bank accounts, process credit card transactions, and potentially access capital markets on more favorable terms.
For medical researchers, the change would remove bureaucratic barriers that have limited clinical studies on cannabis for conditions including chronic pain, epilepsy, and PTSD. Current rules require special federal approval to study Schedule I substances, slowing research that advocates say is decades behind where it should be.
Investors had been watching for this move since the December executive order, and Wednesday's reports appeared to confirm that a formal announcement is close. Cannabis stocks have been volatile in recent years, repeatedly surging on reclassification rumors only to fall back when legislative or regulatory action stalled.
A formal reclassification would mark the most significant shift in federal marijuana policy in decades.
