Cannabis Stocks Explode: Is This the Next Trump-Era Goldmine?

The cannabis sector is ablaze with potential as President Donald Trump signals a possible reclassification of marijuana from Schedule I to Schedule III, a move analysts hail as a “game changer” for the $80 billion market, with a decision looming in the coming weeks. On Monday, August 11, 2025, Canopy Growth (CGC) rocketed over 26% to $1.72, while Tilray Brands (TLRY) surged more than 41% to $1.05, igniting a rally that has Wall Street buzzing. With the S&P 500 at 6,297.36 and Nasdaq at 20,884.27 reflecting a bullish market, yet tariffs (30% on EU/Mexico, 35% on Canada) and geopolitical tensions (Israel-Iran conflict, oil at $75/barrel) adding uncertainty, could cannabis be the next “Trump sector” to watch? This deep dive explores the reclassification impact, stock performances, and trading strategies to ride this green wave.

Reclassification Ripple: A Game-Changing Shift?

Trump’s consideration, reported via the Wall Street Journal, could move marijuana from Schedule I (alongside heroin) to Schedule III (with steroids and Tylenol with codeine), easing federal restrictions. Key implications:

• Tax Relief: Removal of Section 280E would let cannabis firms deduct business expenses, potentially boosting net income by 20-30%.

• Investment Flood: Institutional capital could pour in, lifting valuations as banking access improves.

• Market Expansion: A 64% September rate cut probability and state-level legalization momentum might accelerate interstate commerce.

• Analyst Buzz: Tim Seymour of Seymour Asset Management calls it a “transformative moment,” projecting a $100 billion market by 2027 if federal hurdles fall.

The move hinges on the Attorney General and DEA, but Trump’s backing, bolstered by cannabis industry donations, signals strong political will. Posts on X reflect euphoria, with some touting “the end of the cannabis drought,” though skepticism about execution persists.

Stock Spotlight: CGC and TLRY Lead the Charge

Canopy Growth (CGC)

• Performance: Up 26% to $1.72, hitting a 52-week high, with a 37.6% YTD gain.

• Catalysts: Q1 FY2026 revenue up 24% to $75 million, and a Canopy USA strategy targeting U.S. legalization upsides.

• Valuation: Trading at 1.2x P/S, below its 5-year average of 4.3x, suggesting undervaluation.

• Risks: -26% gross margin in 2023 highlights profitability challenges.

Tilray Brands (TLRY)

• Performance: Up 41.82% to $1.05, with a 61.9% YTD surge, and a 14% after-hours jump Tuesday.

• Catalysts: Diversified revenue ($211 million Q4, up 9% YoY) from beverages and cannabis, plus a $248 million cash reserve.

• Valuation: 1.2x P/S, attractive amid regulatory optimism, with a $1.01 billion market cap.

• Risks: -12.8% operating margin and historical volatility (97.6% drop in 2022).

Other players like Cronos Group (CRON, up 16%) and the AdvisorShares Pure US Cannabis ETF (MSOS, up 25.67%) also rallied, signaling broad sector strength.

The Next “Trump Sector” Contenders

Beyond CGC and TLRY, these stocks could ride the reclassification wave:

• Aurora Cannabis ( $Aurora Cannabis Inc(ACB)$ ): Up 20.5% to $5.40, with a 25% short interest, poised for a squeeze if legalization accelerates.

• Greenlane Holdings ( $Greenlane Holdings Inc.(GNLN)$ ): Jumped 23% to $0.15, a penny stock with high risk-reward potential.

• Trulieve Cannabis ( $Trulieve Cannabis Corporation(TCNNF)$ ): Surged 36% to $8.50, a Florida leader with $1.2 billion revenue, eyeing medical expansion.

The U.S. cannabis market, projected to hit $76.39 billion by 2030 (11.5% CAGR), could see these names soar if Trump delivers, though competition and state regulations pose hurdles.

Trading and Investment Strategies

Short-Term Plays

• Buy CGC on Dip: Enter at $1.60-$1.65, target $2.00-$2.20, stop at $1.50. A 25-35% gain if momentum holds.

• Buy TLRY on Pullback: Grab at $0.95-$1.00, target $1.30-$1.50, stop at $0.90. A 30-50% gain on reclassification news.

• Options Straddle: Buy $1.72 calls/puts on CGC or $1.05 calls/puts on TLRY (August expiry) for volatility, targeting 200-300% gains on a 10%+ move.

• Scalp ACB: Buy at $5.00-$5.20, sell at $5.80-$6.00, stop at $4.80. A 10-15% gain on short covering.

Long-Term Investments

• Hold CGC: Buy at $1.60-$1.65, target $2.50-$3.00 by 2026, for 50-80% upside with U.S. entry. Stop at $1.40.

• Hold TLRY: Buy at $0.95-$1.00, target $2.00-$2.50 by 2026, for 100-150% upside with diversification. Stop at $0.85.

• Hold MSOS ETF: Buy at $4.00, target $5.00, stop at $3.80, for sector exposure.

• Defensive Play: Buy PepsiCo (PEP) at $175-$180, target $190-$200, for 5-11% upside with stability.

Hedge Strategies

• VIXY ETF: Buy at $15, target $18, stop at $13, to hedge tariff or policy volatility.

• SPY ETF Puts: Use puts at $614 to protect against a 5-10% market pullback.

• Gold ETF (GLD): Buy at $200, target $220, stop at $190, as a safe-haven hedge.

My Trading Plan

I’m bullish on cannabis’s reclassification potential, targeting $2.00-$2.20 for CGC and $1.30-$1.50 for TLRY by late August if Trump’s move solidifies. I’ll buy CGC at $1.60-$1.65, targeting $2.00-$2.20, with a $1.50 stop, and TLRY at $0.95-$1.00, targeting $1.30-$1.50, with a $0.90 stop. I’ll use a $1.72/1.05 call/put straddle for volatility. For diversification, I’ll add MSOS at $4.00, targeting $5.00, with a $3.80 stop, and PEP at $175-$180, targeting $190, with a $170 stop. I’m hedging with VIXY at $15, targeting $18, and keeping 20% cash for dips if tariffs or policy delays hit. I’ll monitor Trump’s announcement and earnings updates.

Key Metrics

The Bigger Picture

Canopy Growth and Tilray Brands’ 26% and 41% rallies on August 11, 2025, signal a cannabis sector awakening, fueled by Trump’s reclassification hint. The $80 billion market could expand to $100 billion by 2027 if Schedule III status unlocks tax and investment benefits, with Aurora and others poised to join the surge. Yet, tariffs and state-level risks could trigger a 10-15% pullback if momentum fades. Investors should buy on dips, leverage options for volatility, and hedge with VIXY or GLD to manage risks. This could be the next Trump-era boom—position now to cash in.

Which cannabis stock are you eyeing for the next leg up? Share your picks below! 🎁

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