Cannabis stocks leapt on Friday after reports suggested U.S. President Trump plans to push federal agencies to loosen decades-old restrictions on marijuana. The Washington Post reported that the administration intends to move cannabis from the federal list of Schedule I drugs to Schedule III, a change that would place the plant in the same regulatory bracket as common prescription painkillers. That single shift could open the door to major legal and financial changes for an industry that has waited years for a true national framework to operate within.
Investors reacted immediately. Shares of Tilray Brands, Inc. (NASDAQ: TLRY) and Canopy Growth Corporation (NASDAQ: CGC) both climbed sharply during Friday trading. The move reflected not only the headline excitement but also years of pent-up expectation. For more than a decade, U.S. cannabis policy has been trapped between state legalization and federal prohibition, leaving companies in a legal gray zone: legal to sell in many states but still barred from normal banking channels.
If the proposed reclassification becomes official, marijuana would remain illegal for recreational use at the federal level, but the criminal and financial restrictions that make business operations cumbersome could ease significantly. A Schedule III drug can be prescribed, manufactured, and distributed under medical oversight. This shift would carry large downstream effects for taxes, financing, and even investor confidence.
Previous discussions about reclassification have surfaced repeatedly, though few have gone anywhere. Under the Obama administration, there was quiet pressure from states such as Colorado and Washington to reconcile state and federal law. Those calls resurfaced during Joe Biden’s term, when the administration asked health and justice officials to review cannabis’s legal standing. Yet despite public statements, formal action never occurred. Each administration since the early 2000s has flirted with reform, only to leave the final steps undone. For investors and operators, this cycle of expectation and disappointment has become almost routine.
The current development might feel different mainly because of the political source. A Republican president calling for administrative movement on cannabis suggests a broader cultural shift. Federal reclassification does not equate to immediate legalization, but it could normalize an industry still handled like an outlaw in financial services. Banks have long avoided cannabis companies, citing federal money-laundering statutes. As a result, many dispensaries and distributors operate almost entirely in cash, storing daily earnings in safes, employing private security, and paying taxes by hand-delivered envelopes.
Reclassification could fix much of that by allowing banks governed by federal regulators to open accounts for cannabis businesses without violating anti-drug financing laws. That change would make the sector “bankable” in the same sense as any other regulated business. For the Treasury Department, it would mean cleaner oversight, digital recordkeeping, and a more traceable tax base. For the companies themselves, access to credit, payroll systems, and card payments could transform how they operate. The ripple effect could reach landlords, insurers, and all the ancillary services that currently steer clear of cannabis exposure.
Still, skepticism runs deep within the industry. Every major policy rumor of the past decade has triggered temporary rallies in cannabis stocks, only to fade when reforms stalled in Congress or the Department of Justice. Real regulatory change happens through administrative rulings or legislative acts, both of which require coordination across multiple agencies. While Trump’s reported plan involves directing those agencies to begin the process, there is no set timeline, documentation, or official confirmation yet. Until that appears on the Federal Register, the rally rests on hope rather than fact.
The potential business upside, however, is getting harder to ignore. The U.S. cannabis market already operates in dozens of states and employs more than 400,000 people. With federal banking recognition, revenue could move through legitimate financial pipelines, opening access to institutional investment and even public market growth. For now, the marijuana industry remains in a waiting pattern, energized by another headline yet mindful of its long history of unfinished promises. Whether this moment finally ends that cycle will depend on how much Washington’s intentions turn into law rather than another round of speculation.
