Key insights
- The Trump administration is expected to finalize the rescheduling of cannabis to Schedule III, potentially today. This follows Biden-initiated steps in 2022. Cannabis stocks are rallying, with MSOS up 25%. Rescheduling would allow cannabis businesses to deduct expenses, lowering tax rates, and acknowledges medical benefits, potentially leading to federal medical cannabis guidelines. This is a bullish catalyst for the cannabis sector.
Per Axios: https://www.axios.com/2026/04/22/trump-marijuana-rule-change
The Trump administration is expected to move to reclassify marijuana as soon as Wednesday, per an administration official familiar with the matter.
Why it matters: The move would make it easier to study medicinal applications of marijuana and could shore up support from influencers who support the research.
The move follows an executive order from the president last year to finish reclassifying marijuana as a Schedule III drug, which is a years-long process.
How it works: Reclassifying marijuana eases U.S. Drug Enforcement Administration barriers to researching the drug's potential use cases.
It would not immediately legalize marijuana, nor would it affect the sentences of those incarcerated for possession.
This would conclude the rescheduling process that began under Joe Biden back in 2022 that has been slowly working its way through administrative channels.
If these reports are correct, this would be the most significant cannabis reform at the federal level in over 50 years. The main benefits of rescheduling would be that cannabis businesses would be able to deduct business expenses on their federal taxes allowing them to pay tax rates equivalent to any other law abiding business in the US. Currently these businesses often pay tax rates of over 70%, preventing many from ever becoming profitable.
This would also dramatically change how the federal government views cannabis, as schedule 3 would now mean the US government recognizes that it has medical benefits. This would likely lead to guidelines for a federal medical cannabis program as well as federal protections for medical cannabis users, such as exemptions from drug tests, etc
Cannabis stocks are up massively on this news, with the main US cannabis ETF $MSOS halting initially and is now up 25% on the day. Individual names like $GTBIF, $TCNNF, and $CURLF are up well over 20% as well