Of all the sectors that investors could see reaping the benefits of a “Trump bump,” the cannabis industry would probably not be the first that comes to mind.
But just as has happened with the crypto industry, semiconductors, and rare earth mineral manufacturers, cannabis stocks are surging after getting a surprising endorsement from the US president.
On Sunday, Trump shared on Truth Social (without comment) a nearly three minute promotional video from the Commonwealth Project, which is seeking to make medical cannabis available to seniors.
The video centers around the use of hemp-derived cannabidiol (CBD) to help seniors “feel better, live longer and improve their quality of life significantly.”
Specifically, the promotional video from the Commonwealth Project is calling on CBD products to be covered under Medicare insurance in the US.
The video includes a clip from a report by the Trump-aligned Fox News network where journalist Brett Baier cites a PricewatershouseCooper study estimating “annual cost-savings for the US of nearly $64 billion a year if cannabis is fully integrated into the healthcare system.”
This is noteworthy because back in August, The Wall Street Journal reported that President Trump is currently contemplating a move to reclassify marijuana as a less dangerous drug, which would also open the door for the integration of cannabis into the healthcare system.
Trump’s Truth Social post sent some of the biggest cannabis stocks surging on Monday: Tilray Brands (TLRY) soared 60.9%, Cronos Group (CRON) gained 12.9% and Canopy Growth Corp. (CGC) was up 17.2%.
Irwin D. Simon, chairman and CEO of Tilray, said on X that Trump’s “recent post on Truth Social about the potential health benefits of cannabis for seniors [is] a major milestone in the national healthcare conversation.”
“This is our call to action: Let’s work together - industry, policymakers, and the medical community - to deliver on the promise of cannabis for senior healthcare,” Simon added.
Reclassification could fuel further industry growth
The push to reclassify marijuana to a less dangerous drug was actually started under the Biden administration, but the initiative could not be completed before he left office.
According to the Journal, lobbyists and executives in the cannabis industry are pushing Trump to complete what Biden started – and he appears interested in making it happen.
If marijuana is reclassified from a Schedule I to a Schedule III drug, it would not legalize it on a federal level like alcohol – the legalization of marijuana is left up to individual states in the US – but it would reduce criminal penalties for carrying or selling it.
And most crucially, it would also allow for broader medical research of cannabis and allow for pharmaceutical companies to begin manufacturing cannabis-based medical treatments.
The US cannabis industry is projected to generate $34 billion in revenue this year, but if the federal government eases restrictions on the drug through reclassification, that number would be expected to climb even higher in the coming years.
While Trump, who was a resident of Florida before winning the election in November, has said that he voted to legalize marijuana in the state – the measure ultimately fell just short of the 60% approval it needed to pass – he could face some resistance from his own party on relaxing restrictions for cannabis.
Congress is currently debating whether to tighten federal laws related to hemp – and some Republicans “want stricter rules that could make it harder to produce CBD products,” as Bloomberg reported.
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