President Donald Trump Just Fast-Tracked the Rescheduling of Marijuana, and Pot Stocks Plunged -- Here's the Nefarious Reason Why

OG article by Sean Williams

December 22, 2025

President Donald Trump signed an executive order on December 18, 2025, to accelerate the Food and Drug Administration's review of reclassifying cannabis from a Schedule I to a Schedule III substance under the Controlled Substances Act. This follows a 2023 recommendation from the Department of Health and Human Services, aiming to recognize cannabis's medical benefits and facilitate research into medical marijuana and cannabidiol therapies.

Upon the announcement, several pot stocks experienced significant declines. Trulieve Cannabis dropped 24%, Curaleaf fell 32%, Cresco Labs decreased by 39%, Green Thumb Industries shed 17%, and Canopy Growth lost 12%. The market reaction stemmed from the executive order's explicit exclusion of recreational marijuana legalization. Trump stated it does not legalize or sanction recreational use, emphasizing that such substances should only be used medically under a doctor's recommendation. This stance halts progress toward federal adult-use cannabis, despite legalization in 24 states plus Washington, D.C., where recreational sales are projected to dominate revenue, estimated at $42.8 billion versus $14.1 billion for medical in 2028.

The reclassification, however, offers potential benefits for cannabis companies. It could enable access to basic financial services previously restricted due to federal scheduling, allowing banks to provide loans and credit without legal risks. This may reduce borrowing costs and decrease reliance on dilutive share offerings. Additionally, rescheduling would exempt companies from Internal Revenue Code Section 280E, which limits deductions for businesses dealing in Schedule I or II substances to cost of goods sold only. Lifting this constraint would permit deductions for expenses like rent and payroll, potentially improving operating margins and financial results in future quarters.

While the executive order advances medical cannabis, it precludes federal recreational legalization during Trump's presidency until January 20, 2029, limiting broader market expansion for affected firms.