Cannabis-related stocks surged following remarks from U.S. President Donald Trump, who praised the potential health benefits of cannabidiol (CBD) for older adults in a recent social media post. Trump stated that CBD could help slow disease progression in senior patients, offering an alternative to traditional medications.
The statement comes a month after he hinted that his administration was considering reclassifying cannabis. Such a move could ease federal penalties and reduce some of the restrictions currently tied to cannabis use.
Canopy Growth shares surged more than 18 percent, Tilray Brands rocketed over 40 percent, Aurora Cannabis jumped about 25 percent, and Cronos Group gained nearly 16 percent. Cannabis-focused exchange-traded funds (ETFs) also saw a strong rally. The AdvisorShares fund and Roundhilleach advanced almost 22 percent, leaving both on pace for record-breaking quarterly gains of over 70 percent.
Cannabis policy in the United States has been shaped by shifting administrations. Trump previously signed the 2018 Farm Bill, which removed many restrictions on CBD and hemp production. However, cannabis is still classified as a Schedule I drug under federal law, a category reserved for substances considered highly addictive with no recognized medical use.
Efforts to change cannabis classification have been ongoing. Under President Joe Biden, the Health and Human Services Department recommended moving cannabis to Schedule III, a category for substances with a lower risk of dependence. Such a step would not legalize the drug but would ease restrictions on companies operating in the space.
Currently, federal tax code Section 280E prevents them from taking standard business deductions, leaving many firms at a disadvantage. Adjusting marijuana’s status could open doors to institutional investors and eventually allow cannabis companies to trade on major U.S. exchanges. Beyond taxes, reclassification could help narrow the divide between federal law and state-level legalization, which now exists in almost 40 states.
The industry remains volatile, with stock prices swinging alongside political developments. Canopy Growth, for instance, has seen nearly 50 percent of its value wiped out this year, while SNDL and Cronos have posted gains of over 50 percent, boosted in part by Monday’s rally.
Industry leaders welcomed the latest signals from Trump. A Canopy Growth Corp. (NASDAQ: CGC) (TSX: WEED) spokesperson said the company is encouraged by recognition of marijuana’s role in supporting wellness, particularly for seniors. They added that through its U.S. affiliate, Canopy is ready to expand if the regulatory environment improves. The entire industry is waiting on those regulatory improvements.
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