Cannabis Stocks Explode 20% After Trump's Surprise CBD Endorsement

TLDR

Table of Contents

President Trump endorsed CBD for senior healthcare on Truth Social, calling it revolutionary for reducing disease progression
Cannabis stocks surged in premarket trading with Canopy Growth and Tilray jumping nearly 20%
The AdvisorShares Pure U.S. Cannabis ETF (MSOS) jumped 25.2% and is tracking for its biggest quarterly gain of around 70%
Trump previously hinted at marijuana reclassification from Schedule I to Schedule III status
Reclassification would remove tax burdens under Section 280E and allow more cannabis companies to list on major exchanges

Cannabis stocks experienced a sharp rally in premarket trading Monday after President Donald Trump publicly endorsed cannabidiol (CBD) for senior healthcare applications. The endorsement came through a post on Truth Social where Trump described hemp-derived CBD as potentially revolutionary for senior health.

Wow… Trump is posting ahout the endocannabinoid system.
• Our brains are wired with cannabinoid receptors whether you consume it or not.
• Cannabis oil cures cancer.
Legalize cannabis 🍃 pic.twitter.com/zSK0xoR9CO
— ĐⱤØ₲Ø🇺🇸 (@KAGdrogo) September 28, 2025

Trump stated that CBD could help reduce disease progression and serve as an alternative to prescription drugs for elderly patients. This marks his strongest public support for cannabis-related products since taking office in January 2025.

The market response was immediate and substantial. U.S.-listed shares of major cannabis companies saw double-digit gains before market opening.

Canopy Growth and Tilray Brands both jumped nearly 20% in premarket trading. Cronos Group added 9.5% while Aurora Cannabis gained 13.7%.

The AdvisorShares Pure U.S. Cannabis ETF (MSOS) surged 25.2% and is now tracking for its biggest quarterly gain on record at around 70%. Ben Laidler from Bradesco BBI noted that any presidential support goes a long way for this struggling sector.

Regulatory Background

Cannabis regulations saw some easing during Trump’s first presidential term through the Agriculture Improvement Act. This legislation reduced restrictions around commercial hemp and CBD use.

However, marijuana remains classified as a Schedule I substance under the Controlled Substances Act. This classification indicates high abuse potential and no accepted medical use.

Former President Biden had directed health officials to review marijuana’s scheduling status. The Department of Health and Human Services recommended moving it to Schedule III, indicating moderate to low dependence potential.

Trump previously hinted at plans for reclassification last month. Daniela Hathorn from Capital.com explained that reclassification wouldn’t legalize marijuana but would reduce regulatory burdens on companies.

Market Impact and Industry Performance

Cannabis stocks have shown extreme volatility throughout the ongoing federal legalization debate. Individual company performance has varied widely this year.

Canopy Growth has lost half its value in 2025. Meanwhile, Cronos and SNDL have both gained more than 30%.

The sector remains sensitive to regulatory announcements and political developments. Trading volumes for cannabis stocks have remained elevated due to ongoing uncertainty.

Reclassification would eliminate tax burdens under Section 280E, which denies standard business deductions to cannabis companies. This change could enable more cannabis firms to list on major U.S. stock exchanges.

Institutional investor interest could increase if the tax barrier gets resolved. Currently, the regulatory environment limits institutional participation in cannabis investments.

The policy change would also narrow gaps between state and federal cannabis laws. Nearly 40 states have legalized marijuana in some form.

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