President Donald Trump has signed an executive order to reclassify marijuana from a Schedule I drug to a Schedule III substance. This move acknowledges marijuana’s medical uses but still does not permit recreational use.
The change means marijuana will now be recognized as a drug with legitimate medical benefits, particularly for pain management and as an alternative to opioids. However, the order does not legalize marijuana for recreational purposes. Schedule III drugs are considered to have a lower potential for abuse compared to Schedule I substances like heroin.
Along with the reclassification, Medicare will offer $500 annually in CBD products for eligible beneficiaries starting in April 2026.
Cannabis Stocks React to the Decision
Following the announcement, cannabis stocks, including Tilray Brands and Canopy Growth, saw sharp declines, with Tilray dropping 8.4%. The AdvisorShares Pure US Cannabis ETF lost nearly 27% of its value. Investors had hoped the decision would lead to broader legalization or increased commercial opportunities, but the shift only addresses medical use.
Potential for Future Industry Growth
Despite initial setbacks, experts believe the move could eventually benefit the cannabis industry. The decision may lead to greater institutional acceptance and help reduce risks associated with policy changes. It may also provide renewed interest in the SAFER Banking Act, which aims to protect banks that work with cannabis companies.
Backlash from Republicans
Trump’s decision has faced criticism from some members of his own party. 26 House Republicans and 21 Senate Republicans sent letters urging him to oppose the reclassification, arguing it would send the wrong message to the public and enable drug cartels.
