US President Donald Trump said on Monday he is considering an executive order to reclassify marijuana as a less dangerous drug — a decision that could reshape the cannabis industry, ease criminal penalties and unlock billions in research funding.
The shift would represent one of the most significant federal changes to marijuana policy in decades, reducing oversight to the level of common prescription drugs and potentially opening doors long closed to banks and investors.
“We are looking at that very strongly,” Trump told reporters in the Oval Office, responding to reports that he is looking at directing federal health and law enforcement agencies to treat marijuana as a Schedule III drug.
“A lot of people want to see it — the reclassification – because it leads to tremendous amounts of research that can’t be done unless you reclassify,” he said.
Under the US Controlled Substances Act, marijuana is listed as a Schedule I substance like heroin, ecstasy and peyote, implying it has a high potential for abuse and no currently accepted medical use.
Local authorities often impose more lax regulations on weed, allowing medical or recreational use.
Initial reports that Trump might loosen federal restrictions on the psychoactive drug sent stocks of cannabis-related companies higher.
They stand to benefit by making more cannabis products.
The shift could reshape the industry by potentially lowering taxes and making it easier to secure funding.
Schedule III drugs include Tylenol mixed with codeine, ketamine and testosterone.
Funding remains one of the biggest challenges for cannabis producers, as federal restrictions keep most banks and institutional investors out of the sector, forcing pot producers to turn to costly loans or alternative lenders.
US-listed cannabis-linked stocks, such as Canopy Growth, Organigram Global , SNDL , Aurora Cannabis, Trulieve Cannabis and Tilray Brands, closed down between 4% and 13%.
The stocks are nonetheless still higher than after reports of the reclassification first emerged last week.
“Should the US move to reclassify cannabis – we see this as a meaningful step forward for the global industry and one that must also come with smart regulation,” a spokesperson for Aurora Cannabis told Reuters.
Trulieve Cannabis declined to comment, while several of the other companies did not immediately respond to Reuters’ request for comment.
A White House official said on Friday that “no final decisions have been made on the rescheduling of marijuana.”
Last year, the Biden administration asked the Department of Health and Human Services to review marijuana’s classification, and the agency recommended moving it to Schedule III classification.
The Drug Enforcement Administration has to review the recommendation and will decide on the reclassification.
