US President Donald Trump on Thursday signed an executive order asking the U.S. government to reschedule cannabis, a move that marks the most significant federal reform on the substance in decades, although shares of U.S. and Canadian pot producers sold off on the news.
The move, which does not legalize marijuana and does not carry a specific timeline, is intended to open up research into potential medical uses, according to Trump administration officials.
Industry executives, meanwhile, said the reclassification — which would put cannabis in the same drug category as things like Tylenol with codeine — would ease tax burdens that have squeezed profits.
Trump also said he is asking Congress to reconsider the classification of hemp-derived CBD to enable access by seniors. Dr. Mehmet Oz, who heads the Centers for Medicare & Medicaid Services, also said he would let the agency approve Medicare patients to get CBD “as early as April of next year, and at no charge if their doctors recommend.”
“This action has been requested by American patients suffering from extreme pain, incurable diseases, aggressive cancers, seizure disorders, neurological problems and more, including numerous veterans with service-related injuries and older Americans who live with chronic medical problems that severely degrade their quality of life,” Trump said during a White House event for the signing of the order.
The executive order would direct the attorney general to hasten the process of rescheduling cannabis to a Schedule III drug from its Schedule I status alongside drugs like heroin and LSD. The order said the attorney general should make those changes “in the most expeditious manner in accordance with federal law.”
“It is critical to close the gap between current medical marijuana and CBD use and medical knowledge of risks and benefits, including for specific populations and conditions,” the order said.
Cannabis stocks were trading mixed on Thursday following the news, as investors likely moved to take profits following earlier speculation on Trump’s executive order.
The AdvisorShares Pure U.S. Cannabis exchange-traded fund finished 26.9% lower on Thursday. Shares of Curaleaf Holdings, a cannabis producer that operates in multiple U.S. states, tumbled 32%, while rival Trulieve Cannabis fell 23.2%.
Among Canadian names, Tilray Brands fell 4.2%. Shares of Canopy Growth lost 12%.
Stocks in the sector had surged last week on preliminary news that Trump was working to reclassify marijuana. The stocks gained further on Tuesday, a day after Trump said he was “very strongly” weighing rescheduling.
Senior Trump administration officials told reporters on Thursday that Trump’s primary goal with his rescheduling order is to boost research into medical marijuana and cannabidiol products so that patients and doctors are better informed. Cannabidiol, or CBD, is a compound found in the cannabis plant.
The president had heard from many people who talked up the potential benefits of medical marijuana and CBD use, according to the officials, who added that the administration’s moves were not condoning the use of cannabis by adolescents or as a recreational drug. There was no specific timeline for rescheduling given in the order, but it’s meant to be done as soon as possible, according to the officials.
During the 2024 White House race, Trump announced his support for a Florida ballot initiative, which ended up failing, that would have allowed for adult recreational use of cannabis in his home state, and he promised to focus on rescheduling the drug as president.
When asked on Thursday if Trump would push for full legalization of marijuana for recreational use, administration officials said they wouldn’t speculate on what the president may be considering next.
When Trump was asked about his fellow Republicans’ objections to rescheduling, he pointed to favorable polling on the issue. He also said people going “through this horrible ordeal of cancer or other things” have realized that “this is something that makes them feel better.”
Still, 22 Republican senators sent a letter to the president on Wednesday opposing rescheduling. Twenty-six House Republicans sent a similar letter on Thursday.
“Reclassifying marijuana as a Schedule III drug will send the wrong message to America’s children, enable drug cartels, and make our roads more dangerous,” the House lawmakers said in their letter. The senators wrote that “facilitating the growth of the marijuana industry is at odds with growing our economy and encouraging healthy lifestyles for Americans.”
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