U.S. cannabis stocks experienced a historic rally on Monday after President Donald Trump shared a video promoting medical applications of cannabis-derived products on his Truth Social account, fueling investor optimism around potential regulatory reforms.
Shares of Tilray Brands (NASDAQ: TLRY) surged 61%, hitting a 13-month high and pushing its market capitalization above $2 billion. Industry leaders Canopy Growth and Cronos Group also jumped 17% and 13%, respectively, reflecting broad-based sector momentum.Market analysts suggest the explosive rally signals both expectations for policy easing and growing capital interest in the emerging cannabis sector.
On Sunday, Trump shared a nearly three-minute video produced by the nonprofit The Commonwealth Project. While Trump does not appear in the clip, his reposting is widely interpreted as a political endorsement. The video presents several groundbreaking claims:
Notably, the video explicitly calls for Medicare coverage of CBD-based treatments. Investors now perceive Trump’s stance as moving beyond legalization toward active federal subsidization of cannabis products. Such a shift would fundamentally alter the industry’s business model, unlocking a massive government-backed market targeting tens of millions of seniors.
The White House and senior lawmakers are already evaluating policy adjustments that could reshape the multibillion-dollar CBD market. In August, Trump indicated that his administration was reviewing the reclassification of marijuana from a Schedule I to a Schedule III substance under the Controlled Substances Act—a move initially set in motion by the Biden administration.
Analysts highlight that reclassification would bring transformative financial benefits. While about 40 states have legalized medical marijuana, its current federal status prevents cannabis companies from taking standard tax deductions. A shift to Schedule III could reduce effective tax rates for leading firms by 30-40%, translating into hundreds of millions in increased profits.
Despite the bullish momentum, the industry continues to face regulatory uncertainty. Senate Republican Leader Mitch McConnell has pushed to ban hemp products containing any quantifiable amount of THC, the psychoactive component in cannabis. Meanwhile, California recently enacted regulations limiting intoxicating hemp products to licensed dispensaries. Industry experts warn that banning products with even trace THC could devastate U.S. hemp growers, given the technical difficulty of producing entirely THC-free CBD extracts.
Cannabis policy looks set to remain a key issue—with investor sentiment increasingly tied to the prospects of federal reform.
