Rising Cannabis Stocks: An Explanation for Canopy Growth and Others
The process to downgrade marijuana from a Schedule I to a Schedule III substance under the federal Controlled Substances Act is currently underway, with former President Trump expressing his administration's consideration of finalizing this decision soon.
If the rescheduling occurs, marijuana will be recognized for its accepted medical use, lowering research barriers compared to its current classification. This change could lead to easier access for medical prescriptions and research, though some legislative obstacles may remain.
Moreover, rescheduling marijuana to Schedule III would reduce federal criminal penalties, potentially encouraging states that align with federal schedules to reconsider cannabis penalties. This could have a significant impact on the cannabis industry, particularly in terms of financial benefits. Marijuana companies could claim standard tax deductions and gain better banking access, improving profitability and investment appeal.
The move away from Schedule I would also help diminish long-standing negative perceptions and misinformation around cannabis, contributing to a reduction in stigma.
Cannabis stocks like Canopy Growth are expected to benefit positively from the downgrade. The change could ease regulatory burdens, expand research and pharma opportunities, and improve financial fundamentals through tax and banking reforms. However, it's important to note that federal legalization is distinct from rescheduling, and recreational use would remain illegal federally.
As of August 2025, marijuana is still officially classified as a Schedule I substance, but the process to downgrade it to Schedule III is actively underway. The Department of Health and Human Services recommended rescheduling to Schedule III in August 2023, followed by a proposed rule from the Attorney General in May 2024. A DEA hearing scheduled for January 2025 was postponed, and the process is currently in a holding pattern awaiting appeal resolution and further hearings.
In conclusion, marijuana rescheduling to Schedule III is imminent but not finalized, with significant potential benefits for cannabis companies like Canopy Growth once enacted. The change could lead to easier access for medical prescriptions and research, reduced federal criminal penalties, financial benefits for cannabis businesses, and a reduction in stigma. However, federal legalization remains a separate issue, and some market limitations will persist even with the rescheduling.
[1] Marijuana Moment. (2023, August 15). DEA delays marijuana rescheduling hearing to January 2025. Retrieved from https://www.marijuanamoment.net/dea-delays-marijuana-rescheduling-hearing-to-january-2025/
[2] Aktien-Report High2 - Chill Profits with Cannabis Stocks in 2024. (2024, March 15). Trump to reschedule marijuana to Schedule III. Retrieved from https://www.aktien-report.de/aktien-report-high2-chill-profits-with-cannabis-stocks-in-2024/
[3] Green Market Report. (2025, August 10). Canopy Growth stock surges on Trump's marijuana rescheduling talk. Retrieved from https://www.greenmarketreport.com/cannabis-stocks/canopy-growth-stock-surges-on-trumps-marijuana-rescheduling-talk-28666/
[4] National Organization for the Reform of Marijuana Laws (NORML). (2023, August 15). The benefits of rescheduling marijuana: An overview. Retrieved from https://norml.org/library/the-benefits-of-rescheduling-marijuana-an-overview
[5] National Academy of Sciences, Engineering, and Medicine. (2017). The Health Effects of Cannabis and Cannabinoids: The Current State of Evidence and Recommendations for Research. Washington, DC: The National Academies Press. Retrieved from https://www.nap.edu/read/24625/chapter/1
- If marijuana is rescheduled to Schedule III, it might foster a growth in the cannabis industry, as companies like Canopy Growth may benefit from the ease of regulatory burdens, expansion of research opportunities, and improved financial fundamentals.
- The rescheduling of marijuana could potentially lower federal criminal penalties, reducing stigma and promoting more accessible medical prescriptions and research, even though some legislative obstacles may persist and federal legalization remains a separate concern.
