Cannabis Stocks Surge on Trump's Reclassification Comments
Former President's remarks on social media ignite rally, with Tilray surging over 60% on hopes of favorable regulatory changes.
The cannabis sector experienced a massive rally, with some stocks soaring as much as 60%, following weekend social media posts from former President Donald Trump that hinted at a potential federal reclassification of marijuana. The comments, which also highlighted the potential of cannabidiol (CBD) for senior care, sent a jolt through the beleaguered industry, sparking hopes of a significant financial overhaul.
Leading the surge was Tilray (TLRY), which saw its shares jump by more than 60%, while the AdvisorShares Pure US Cannabis ETF (MSOS) gained over 51%. This market reaction was directly tied to Trump's posts suggesting that a change to a Schedule III classification for marijuana could represent a 'financial revolution' for the industry. Such a move would be a game-changer, primarily by allowing cannabis companies to deduct normal business expenses from their taxes, a practice currently forbidden under the 280E tax code.
The prospect of has long been a major catalyst for the cannabis sector, which has struggled under the weight of federal prohibition. In addition to the tax benefits, reclassification could pave the way for cannabis companies to list on major U.S. stock exchanges and gain access to traditional banking services, two significant hurdles that have hampered growth and access to capital.
Trump's specific mention of CBD's potential benefits for seniors also caught the market's attention. In his posts, he suggested that CBD could 'revolutionize senior healthcare.' This statement, coming from a figure with significant political influence, was interpreted by investors as a strong signal of a more favorable stance towards the cannabis industry. While no official policy change has been announced, the underscores the immense impact that federal drug policy has on the sector's valuation and future prospects.
Analysts note that any support for the industry is significant. The potential for a full reclassification remains a key focus for investors, who see it as the single most important catalyst for unlocking the domestic market's full potential. For now, the rally serves as a potent reminder of the sector's volatility and its sensitivity to .