Cannabis Stocks Rally Following Trump’s Comments on Rescheduling Cannabis

This analysis is based on a MarketWatch report [1] published on December 16, 2025, which documented a rally in cannabis stocks following President Trump’s comments about potential cannabis rescheduling via executive order. The announcement came amid a week of volatility for the sector, with initial reports of rescheduling on December 12 sparking a rally, followed by a pullback on December 15, and then a renewed surge on December 16 after the president’s remarks [0][1][2].

The market impact was significant: Tilray Brands (TLRY) surged 25.90% to $13.22 per share, Canopy Growth (CGC) rose 19.86% to $1.87 per share, and Cronos Group (CRON) posted a more modest 3.81% increase to $3.13 per share on December 16 [0]. These gains occurred despite minor declines in the broader Consumer Defensive (-0.18625%) and Healthcare (-0.62563%) sectors, where most cannabis stocks are categorized, indicating a sector-specific reaction [0]. Volume surges accompanied the price increases, with TLRY trading 24.37 million shares and CGC trading 87.68 million shares [0].

1. Investor Sentiment
   : The rallies reflect investor optimism that federal rescheduling could reduce regulatory burdens, improve access to banking services, and enhance profitability for cannabis companies [1][2].
2. Volatility Patterns
   : The sector has exhibited extreme volatility in a short period—TLRY rose 44.1% on December 12, fell 11.78% on December 15, and then gained 25.90% on December 16—highlighting investor uncertainty around the potential rescheduling’s specifics and likelihood of implementation [0][2].
3. Legal and Regulatory Risks
   : Executive action on cannabis rescheduling may face legal challenges, as Congress typically has authority over drug scheduling under the Controlled Substances Act, creating uncertainty about the policy’s long-term viability [3].
4. Company-Specific Impacts
   : The varying magnitude of gains (TLRY and CGC saw double-digit increases while CRON’s rise was more modest) suggests that company-specific factors like business models, geographic focus, and regulatory compliance will influence individual performance [0].

• Opportunities
  : Successful rescheduling could open new markets, reduce compliance costs, and attract institutional investment, potentially driving long-term growth for the cannabis sector [1][2].
• Risks
  : Regulatory uncertainties (exact details of rescheduling, implementation timeline, legal challenges) could lead to sharp price declines if the executive order faces hurdles or is not implemented as expected [3]. Market overreaction to news, as seen in recent volatility, could result in valuations misaligned with fundamentals [2]. Increased regulatory clarity might also attract new competitors, pressuring existing companies’ market share and margins [4]. Additionally, state-level cannabis laws will continue to vary, creating operational complexity [5].

Cannabis stocks experienced a significant rally on December 16, 2025, following President Trump’s comments about potential rescheduling. Leading stocks TLRY, CGC, and CRON posted gains, with TLRY and CGC seeing double-digit increases. The sector’s volatility over the past week underscores investor uncertainty about the regulatory changes. While rescheduling could present long-term opportunities, decision-makers must consider the legal challenges, market overreaction risks, and company-specific factors that may impact performance.

All sources referenced in this report are listed below for traceability.