Cannabis stocks moved sharply higher on Friday after reports that President Donald Trump is considering directing federal agencies to reclassify marijuana as a less restrictive drug under U.S. law. While no formal decision has been announced, the renewed policy discussion was enough to drive one of the sector’s strongest trading sessions in years.
According to reports from Bloomberg and The Washington Post, Trump has discussed moving marijuana from Schedule I to Schedule III with industry executives and senior government officials. Such a shift would place cannabis alongside drugs with recognized medical use and lower regulatory barriers, rather than in the most restrictive category under federal law.
A Broad-Based Market Reaction
The prospect of reclassification triggered sharp gains across cannabis equities:
- Tilray Brands (TLRY) surged more than 25%
- Canopy Growth (CGC) jumped over 24%
- Aurora Cannabis (ACB) gained 15%
- SNDL (SNDL) advanced 19%
- Cronos Group (CRON) climbed 14%
The strength extended beyond individual names. The PRISM Emerging Cannabis Index rose approximately 20 % on the day, marking one of its strongest single-session performances since inception. The index is now up more than 29% since launch, reflecting renewed interest across small- and micro-cap cannabis stocks.
Why Schedule III Reclassification Could Reshape the Cannabis Investment Landscape
Cannabis remains classified as a Schedule I substance, a designation reserved for drugs deemed to have no accepted medical use and a high potential for abuse. Reclassification to Schedule III would not legalize cannabis federally, but it could meaningfully change the operating landscape.
Potential impacts include fewer restrictions on research, improved access to financial services, and relief from certain tax limitations that have weighed on industry profitability. For investors, even incremental regulatory clarity has historically driven sharp repricing across the sector.
A White House official cautioned that no final determination has been made, but the market’s response underscores how sensitive cannabis stocks remain to federal policy signals after years of uncertainty.
A Sector Reacting to Policy, Not Fundamentals Alone
Cannabis equities have been pressured for years by regulatory delays, capital constraints, and shifting investor sentiment. Many companies trade well below prior highs, despite continued consumer demand and expanding legalization at the state level.
Friday’s rally highlights a familiar dynamic in the space. Policy developments, even preliminary ones, can quickly reset expectations and drive outsized price moves. Whether this momentum holds will depend on how discussions evolve and whether formal actions follow.
What to Watch Next
Investors will now look for clarity from federal agencies and any formal guidance on reclassification. While optimism has returned, the path forward remains uncertain and subject to regulatory timelines.
For now, the strong gains across individual stocks and the sharp move in the PRISM Emerging Cannabis Index reflect a rapid shift in sentiment driven by policy expectations rather than confirmed outcomes.
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