Cannabis stocks just ignited like a Fourth of July sparkler on Wall Street!

On Friday, reports surfaced that President Trump is poised to reclassify marijuana from a Schedule I to a Schedule III drug under federal law, triggering a massive rally in cannabis shares that’s got investors buzzing with anticipation, as the New York Post reports.

This isn’t just a fleeting blip. It marks one of the most significant single-day surges for the sector in years, offering a rare burst of hope to an industry that’s been mired in a brutal slump, languishing far below its lofty 2021 peaks.

Stock Surges Signal Investor Confidence

Look at Tilray Brands, a Canadian cannabis giant, which rocketed over 40% to $11.85 by late Friday afternoon, even if it’s still a ways off from its 52-week high of $23.20.

Canopy Growth didn’t hold back either, soaring roughly 50% to $1.70 per share, with trading volume exploding past 117 million shares -- a number that dwarfs its typical daily averages.

Meanwhile, Curaleaf shot up 38% to $3.71 per share, and Aurora Cannabis climbed nearly 18% to around $5.35, showcasing a wave of enthusiasm sweeping through the entire cannabis market.

ETF Gains Reflect Industry Revival

Even the AdvisorShares Pure US Cannabis ETF, a key barometer for the domestic industry, leaped over 50% to $5.71, creeping close to its 52-week high of $6.02 after wallowing near a dismal $2 earlier this year.

Under current federal law, marijuana sits in the Schedule I category alongside heavy hitters like heroin and LSD, branded as highly dangerous with no accepted medical use, a classification many argue is outdated and overly punitive.

A shift to Schedule III would signal a major change, recognizing marijuana as less harmful and validating its medical potential, which could be a game-changer for an industry desperate for legitimacy and breathing room.

Trump’s Pledge Fuels Market Hopes

President Trump has long campaigned on unlocking the medical benefits of marijuana, promising to advocate for rescheduling during his second term, and investors are clearly betting that these latest reports mean action is on the horizon.

However, a White House official threw a bit of cold water on the excitement, stating, "No final decisions have been made," and opting not to elaborate further on the administration’s plans.

With all due respect to the official, that cryptic sidestep isn’t fooling anyone. Markets are already moving as if rescheduling is a done deal, and for a sector hammered by regulatory uncertainty and weak pricing, this feels like a desperately needed shot in the arm.

Challenges Loom Despite Optimism

Let’s keep our feet on the ground, though; despite Friday’s euphoric surge, broad cannabis indices are still down a staggering 90% from their pandemic-era highs, a stark reminder of how far the industry has fallen amid oversupply and limited access to traditional financing.

Rescheduling, if it happens, won’t be an instant fix. It requires a detailed rulemaking process involving agencies like the Drug Enforcement Administration, and even then, it’s not full legalization, leaving interstate commerce and criminal justice reforms in the hands of a notoriously slow-moving Congress.

Advocates view a Schedule III designation as a crucial step forward but only a partial victory, and the staying power of this rally depends heavily on whether Trump issues a formal directive and how swiftly regulators can turn policy into action. Otherwise, this optimism might just evaporate like morning mist in a sector known for volatile swings and dashed hopes.