Cannabis Stocks Rally Grinds to a Halt as Trump Order Uncertainty Looms

Just when the green rush seemed unstoppable, the brakes slammed on.

The Policy Fog Rolls In

Investors are hitting pause, scrambling to parse the potential fallout from a looming White House directive. The details are murky, the timeline unclear—and the market hates nothing more than a vacuum of information. Capital is fleeing to the sidelines, waiting for the political haze to clear.

Momentum Meets Reality

The sector's blistering run-up collided head-on with regulatory risk. It's a classic tale: speculative fervor meets the cold, hard wall of government paperwork. Trading floors are now dominated by one question: Is this a temporary pullback or a fundamental shift?

Portfolios in Purgatory

Holdings are stuck in limbo. The initial euphoria—fueled by legislative hopes and bullish analyst notes—has evaporated. Now, it's a waiting game. Every tweet, every leaked memo, every offhand comment from a Capitol Hill staffer gets magnified and traded on.

Another reminder that in markets, the only thing growing faster than a weed stock sometimes is the gap between investor optimism and political reality. The smart money's on hold, proving once again that in finance, the most profitable position is often... cash.

Key Takeaways

• Weed stocks dropped Monday afternoon, reversing early gains on hopes President Trump could soon issue an executive order reclassifying marijuana. 
• An expected reclassification from a Schedule I to a Schedule III drug would help companies in the sector reduce their taxes and relax banking restrictions.

Weed stocks aren't flying so high anymore.

Shares of Tilray Brands (TLRY) dropped nearly 5%, Canopy Growth (CGC) slipped 3%, and other cannabis stocks also lost ground Monday afternoon, reversing their early gains amid hopes President TRUMP could issue an executive order reclassifying marijuana.

The order, seen changing marijuana from a Schedule I to a Schedule III drug, was expected as soon as today, according to reports late last week. Schedule I drugs, such as heroin and LSD, are considered more dangerous compared to Schedule III drugs, a category which includes steroids.

The WHITE House did not respond to a request for comment Monday in time for publication. A spokesperson told Investopedia Friday that no final decisions had been made.

Why This Matters to Investors

Reclassifying marijuana as a Schedule III drug WOULD benefit cannabis companies by significantly lowering financial and regulatory pressures.

While marijuana has been legalized on the state level in most U.S. states and territories for medicinal or recreational use, it remains illegal under federal law and its classification as a Schedule I drug restricts research on it as a medicine, with more stringent penalties for illegal activities related to it. 

Changing marijuana to a Schedule III drug would help cannabis companies by lowering their tax burden and open up banking options, allowing customers to purchase marijuana with credit cards.

Related Education

With Monday's losses, Tilray Brands have fallen about 15% in 2025 so far, while Canopy Growth shares have lost nearly 40% of their value.