Tilray's stock takes off on hope that cannabis will soon be seen as more like steroids than heroin

By Tomi Kilgore

Trump is reportedly mulling an executive order to downgrade marijuana to a Schedule III drug, which could open the door to banking services

Tilray's stock, and shares of other cannabis companies, soared after reports gave investors hope that the Trump administration would move to have marijuana reclassified as a much less dangerous drug than it is now.

Shares of Tilray Brands rocketed Friday amid rising hope that cannabis is finally on the doorstep of being rescheduled as a lower-class drug, which could open doors for further legalization and banking services.

The Washington Post reported late Thursday that President Donald Trump was pushing to reclassify marijuana as a Schedule III drug alongside some prescription drugs like Tylenol with codeine or anabolic steroids. It is currently classified as a Schedule I drug, on par with heroin and lysergic acid diethylamide, or LSD.

CNBC reported Friday that Trump could sign an executive order to reschedule marijuana as soon as Monday.

From the archives (September 2024): Cannabis stocks rally after Republican candidate Trump supports moving drug to less restrictive category

That would be a boon for Tilray (TLRY), and for all legal cannabis producers and sellers, for a few reasons. But probably the most important is that it would likely lead to larger banks to get into the weed businesses, something they've avoided because cannabis was federally classified as illegal under the Controlled Substance Act.

Tilray's stock soared 44.1% on Friday. Trading volume ballooned to well above 80 million shares, compared with the full-day average over the past 30 days of about 5.1 million shares.

Among others in the weed business, shares of Canopy Growth Corp. (CGC) (CA:WEED) shot up 54%, and Cronos Group's stock ran up 14.7%. The AdvisorShares Pure U.S. Cannabis ETF MSOS skyrocketed 54.3% to a 13-month high.

The lack of banking options has made it difficult to run a legal cannabis business given the lack of funding and the dangers associated with dealing in piles of cash.

And while the Secure and Fair Enforcement Regulation, or SAFER, banking act, aimed at protecting banks from federal restrictions when doing business in a state where cannabis was legal, has been approved by the House of Representatives multiple times, it has yet to get a vote in the Senate.

An executive order from Trump could change all that.

"Bigger picture, this would be the most notable cannabis reform in decades and set the stage for a number of additional catalysts in our view, including additional states legalizing cannabis, SAFER banking being passed," and ultimately having plant-touching cannabis companies move the listing of their stocks to major U.S. stock exchanges, Alliance Global Partners analyst Aaron Grey wrote in a note to clients.

He said it could also lead to strategic investments from companies in traditional consumer-facing businesses.

Keep in mind that the Washington Post story noted that the White House said no decision has yet been made, and that cannabis investors have been burned before.

For example, Tilray's stock rally Friday was the biggest since Sept. 29. It had gained a record 60.9% that day, to close at $18.50, after Trump shared a video on his social-media platform Truth Social, which touted the benefits of cannabidiol - a compound from the cannabis plant - in the care of seniors.

On Friday, even after the big run-up, Tilray's stock ended the trading week 34.3% below where it closed on Sept. 29.

From the archives (February 2025): Trulieve, Curaleaf and Green Thumb launch hemp-based THC drinks as cannabis reforms stall

-Tomi Kilgore

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12-12-25 1722ET