Tilray stock soars 44% as Trump prepares marijuana reclassification executive order, what happens next shocks everyone

Tilray stock soars 44% as Trump prepares marijuana reclassification executive order that could reshape the cannabis industry forever. The White House is positioning to make a historic federal policy shift that traders believe opens unprecedented market opportunities. Here’s everything you need to know about what’s coming.

Tilray’s Explosive Rally Signals Major Policy Shift

Tilray Brands experienced its most dramatic single-day gain in recent memory when the stock exploded 44.13% on December 12, 2025. The surge wasn’t driven by company earnings or quarterly performance. Instead, it reflected trader expectations about a seismic federal policy change coming from the White House. Cannabis stocks nationwide surged on the news, with the entire sector registering historic gains that reversed months of investor pessimism.

The rally indicates Wall Street’s confidence that reclassification to Schedule III would fundamentally alter the economics of cannabis businesses. Companies like Tilray currently operate under crushing federal restrictions that include banking limitations, tax penalties, and research barriers. A Schedule III reclassification would eliminate most of those constraints overnight.

What Trump’s Executive Order Actually Means

According to Reuters and Washington Post reports published December 11-12, President Trump plans to direct federal agencies to reclassify marijuana as a Schedule III controlled substance. This represents a dramatic downgrade from its current Schedule I status, where marijuana sits alongside heroin and LSD as a substance deemed to have no accepted medical use. Schedule III drugs include common prescription painkillers like codeine and anabolic steroids, allowing for medical use with prescriptions and reduced regulatory burden.

The executive order could arrive as early as Monday morning, sources told major news outlets. The directive would instruct the Drug Enforcement Administration (DEA) to finalize the reclassification through official federal channels. While the process requires administrative action, the executive order signals clear White House intent to move the issue forward immediately.

Market Power and Financial Impact Projections

Tilray’s market cap expanded dramatically to approximately $1.4 billion following the announcement. The company trades under ticker TLRY on NASDAQ and represents one of the largest publicly-traded cannabis operators in the United States. Investors recognized that Schedule III reclassification would unlock immediate financial benefits, including reduced tax burdens, improved banking relationships, and expanded research capabilities that could justify higher valuations.

Why Cannabis Companies Face a Transformation Moment

Current federal law imposes the Code Section 280E tax penalty on cannabis businesses, which disallows standard business deductions available to other industries. This creates effective tax rates exceeding 70% in some cases, crushing profitability. Cannabis companies also struggle with banking relationships since federal prohibition makes them high-risk for financial institutions. Schedule III reclassification would eliminate these penalties and open mainstream banking channels.

Additionally, Schedule I status prevents federal medical research, limiting understanding of cannabis therapeutic benefits and slowing pharmaceutical development. Reclassification would permit research institutions and companies to study cannabis openly, potentially creating new pharmaceutical products. The industry also expects improved interstate commerce, clearer FDA pathways for products, and potential tax deductions similar to traditional businesses.

Will Trump Actually Sign the Executive Order Reclassifying Marijuana?

While multiple credible sources reported Trump’s intention to issue the reclassification order by Monday, December 16, 2025, the White House maintained some ambiguity. Officials stated Trump “has not made final decisions,” though reporting from Washington Post, Reuters, and CNBC suggested the order’s signing was imminent. The fact that traders immediately repriced cannabis stocks indicates deep confidence in the report’s accuracy.

The reclassification represents a significant shift from federal cannabis policy under previous administrations. Both Republican and Democratic officials have considered reclassification, but Trump’s explicit intention signals this moment represents a genuine window for federal policy change. If signed, the order would mark the most consequential cannabis policy action in decades, potentially triggering a multi-generational transformation of the cannabis market.

Patrick Graham

Patrick Graham is a business and finance journalist translating Wall Street’s complexities into stories that matter to everyday readers. With extensive experience in financial journalism and economic analysis, this expert journalist provides sharp insights on market trends, corporate developments, and the economic forces affecting daily life. His reporting helps readers make sense of the business world’s biggest moves.