President Donald Trump confirmed Monday that he is “strongly” considering an executive order to reclassify marijuana, a move that could loosen federal regulations on the drug.
Despite the announcement, pot stocks struggled to gain momentum in trading. The Amplify Seymour Cannabis ETF saw a brief uptick in the afternoon after Trump’s comments, but it was still down nearly 7% as investors booked profits following a surge of more than 50% on Friday.
Trump said he was evaluating a reclassification that could move marijuana from its current Schedule I designation to Schedule III, which would place it in the same category as drugs like steroids or Tylenol with codeine. “A lot of people want to see it reclassified, because it leads to tremendous amounts of research that can’t be done unless you reclassify,” he said. “So we are looking at that very strongly.”
The potential change has been anticipated by the cannabis industry for some time, with hopes that it would attract larger investors and improve access to banking services for marijuana companies. Following reports that Trump was considering such an executive order, the sector experienced a record one-day rally on Friday.
Monday’s trading saw major cannabis producers slide, with Tilray falling 10%, Canopy Growth down 4.6%, and retailer SNDL dropping more than 13%. Industry leaders remain cautiously optimistic that a reclassification could move forward, citing growing political and regulatory momentum.