TLDR
- Canopy Growth stock jumped nearly 20% in premarket trading after Trump endorsed CBD for senior healthcare
- President posted on Truth Social that cannabidiol could “revolutionize senior healthcare” as prescription alternative
- CEO Luc Mongeau’s recent insider stock purchase boosted investor confidence before Trump’s announcement
- Cannabis ETF surged 25.2% and is tracking toward record quarterly gains of approximately 70%
- Trump administration signals potential marijuana reclassification that could remove tax burdens
Cannabis stocks exploded higher Monday morning after President Donald Trump endorsed cannabidiol use for senior healthcare. The unexpected presidential backing sent Canopy Growth and other marijuana companies soaring.
Trump posted on Truth Social Sunday evening about CBD’s medical potential. He claimed hemp-derived cannabidiol could “revolutionize senior healthcare” by slowing disease progression and serving as an alternative to prescription drugs.
Canopy Growth shares rocketed nearly 20% in premarket trading following the endorsement. The rally came just days after CEO Luc Mongeau made an unplanned personal stock purchase on September 23.
The timing proved perfect for cannabis investors. Mongeau’s insider buying on Tuesday sparked a two-day rally before Trump’s weekend comments supercharged the sector.
Regulatory Landscape Shifts
Trump’s administration has hinted at major marijuana policy changes. Last month, the president indicated plans to reclassify cannabis from its current Schedule I federal designation.
Current laws classify marijuana as having high abuse potential with no accepted medical use. The Biden administration had directed health agencies to review this status, recommending a move to Schedule III classification.
Reclassification would eliminate Section 280E tax penalties that deny standard business deductions to cannabis companies. This change could enable firms to list on major U.S. stock exchanges and attract institutional investors.
“Trump already hinted that they were planning to reclassify it,” said Daniela Hathorn from Capital.com. “This doesn’t mean it’s legalizing the drug, but it does reduce some of the burden on the companies.”
Market Response Shows Sector Hunger
The AdvisorShares Pure U.S. Cannabis ETF exploded 25.2% higher Monday morning. The fund is now tracking toward its biggest quarterly gain on record of around 70%.
Other major cannabis stocks joined the rally. Tilray Brands surged nearly 20% while Cronos Group added 9.5% and Aurora Cannabis gained 13.7% in premarket trading.
Ben Laidler from Bradesco BBI noted the sector’s desperation for positive news. “MSOS is indicated up 20% at the open and benefiting from President Trump’s surprise Sunday support,” he said.
Cannabis stocks remain highly volatile due to changing political winds. Some companies have lost half their value this year while others gained more than 30%.
Nearly 40 states have legalized marijuana in some form despite federal prohibition. Reclassification would help bridge the gap between state and federal cannabis laws.
The regulatory shift could remove major barriers preventing cannabis companies from accessing traditional banking and capital markets. Current tax laws create substantial financial penalties for marijuana businesses.
Trump’s CBD healthcare endorsement and Canopy Growth CEO’s insider purchase created perfect storm conditions for Monday’s cannabis stock rally.
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