Marijuana Rescheduling Drives Tilray Rally
Marijuana Rescheduling comments by President Trump lifted cannabis stocks on Dec. 16, 2025, sending Tilray higher and boosting options-implied volatility.
KEY TAKEAWAYS
- Trump's rescheduling comments sparked a cannabis rally led by Tilray's 27.5% surge to $13.94 on 46.8 million shares.
- Options markets priced nearly a 22% move for Tilray before year-end, signaling elevated near-term volatility.
- No formal DOJ or DEA action has been announced, leaving implementation and timing uncertain for traders.
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On Dec. 16, 2025, marijuana rescheduling entered the market spotlight after President Donald Trump said he was considering an executive order to move cannabis from Schedule I to Schedule III. The remark renewed investor bets on eased taxes, improved banking access, and expanded medical research.
Trump Comments and Federal Process
President Donald Trump said he was considering an executive order to reclassify marijuana from Schedule I, the strictest federal category, to Schedule III, which includes drugs such as Tylenol with codeine, ketamine, and testosterone. This change would remove marijuana from Schedule I but would not deschedule it or eliminate federal criminal penalties for use and possession. A White House official said no final decisions have been made on rescheduling.
Under the Controlled Substances Act, rescheduling can occur through legislation, rulemaking by the Department of Justice and Drug Enforcement Administration (DOJ/DEA) often following a health agency review, or by an executive order directing agencies to initiate or complete the process. Trump’s comments specifically referenced consideration of an executive order, but no formal DOJ or DEA steps have been announced.
Market Reaction and Industry Impact
Tilray Brands, a global medical cannabis producer, saw its shares rise 27.5% to close at $13.94 on trading volume of 46.8 million shares, about 525% above its three-month average. The surge followed Trump’s remarks and extended to other U.S.-listed cannabis companies, with Canopy Growth and Cronos Group climbing 10.2% and 3.6%, respectively.
Options markets signaled elevated near-term uncertainty for Tilray, pricing in a roughly 22% move before year-end. Market analysts said rescheduling would ease barriers to research, reduce tax burdens—particularly under Internal Revenue Code Section 280E, which currently disallows ordinary tax deductions for Schedule I and II businesses—and improve access to banking. These changes could strengthen industry economics and access to capital.
Financial commentary framed reclassification as a potential path to improved profitability for Tilray. Some media reports also mentioned a proposed Medicare pilot program to expand seniors’ access to cannabis products, though this has not been confirmed by government sources.
The market treated Trump’s comments as a trigger for repositioning but noted the risk of follow-through, as past rescheduling discussions have not always led to formal policy changes. Traders used derivatives and short-dated bets to express a wide range of outcomes while awaiting administrative action.
