Trump Triggers Liberation Day for Stoners with New Weed Reclassification EO…

Up next: Donny Blaze pressures Congress to make the Devils Lettuce totally kosher… 

In case you’ve been under the misunderstanding that weed classifies as one of those drugs that all the people who never left your hometown enjoy the taste of: heroin, LSD, and bath salts… I’ve got news for ya, it’s not. Thanks to Donny the Dealer (read: Trump), federal agencies are being forced to reclassify jazz cabbage. Yes, Mary Jane/whatever other slang word the degenerates call it these days. 

(Source: Giphy) 

Of course, if (and it’s still an if) the DEA follows through, cannabis moves from Schedule I to Schedule III. Translation: it goes from “absolutely illegal, no medical use, how dare you” to “okay fine, ketamine tier.” Is it legalization on the federal level? Not necessarily… nor is it Woodstock, but it is the biggest federal shift on weed policy in decades. Naturally, the markets reaction… well, absolute chaos.

On paper, this should’ve been Christmas morning for cannabis stocks. Schedule III means no more IRS 280E nonsense, which is the tax rule that basically treats weed companies like drug cartels with storefronts. Rent, payroll, normal business expenses? Suddenly deductible. That alone is massive. Add in easier banking access and the possibility of institutional money finally touching the space without compliance lawyers hyperventilating… and yeah, this sounds like the lifeline the industry’s been begging for. Instead, stocks got absolutely nuked. Trulieve tanked more than 23%, Green Thumb got smoked more than 16%, and the AdvisorShares U.S. Cannabis ETF fell out of its a$$ to the magnitude of -27%. 

(Source: CNBC) 

So what da hell gives? Two words: new competition. See, buried in the same news cycle was another curveball… a Medicare pilot program launching in April that could give seniors access to doctor-recommended CBD products. Federally insured revenue. Federal blessing. Federal oversight. That’s when Wall Street started doing the math and realized this might not be the bottle popping moment for today's operators. For instance, Schedule III means Pfizer doesn’t have to pretend weed is radioactive anymore. It means labs, trials, formulations, patents. It means companies that actually know how to navigate the FDA suddenly have a reason to care.

And if you’re a multi-state operator that’s been barely surviving on thin margins, heavy debt, and regulatory whiplash… the idea of competing with companies that print cash and own Congress is less “moon” and more “awh sh*t”. But again, to be clear, this doesn’t legalize recreational marijuana. Trump was explicit about that. This isn’t a green light for dispensaries on every corner or a cultural victory parade. It’s a structural shift… one that helps balance sheets and invites sharks into the pool. Which again, is why you’re seeing the weird disconnect of long-term fundamentals that arguably improve, while near-term equity value gets repriced lower. Translation: This is a classic “this helps the industry but hurts the incumbents” moment.

(Source: Giphy) 

So yeah… historic move we have here. And now Donnie's favorite food makes so much more sense (read: everything the munchies craves) LOL. However, if you bought weed stocks expecting a straight line up, yesterday was a reminder that policy wins don’t always mean shareholder wins. Sometimes they just mean the game got harder. And that’s exactly what happened. Meaning, keep your eyes on this story and place your bets accordingly. Until next time, friends… 

At the time of publishing, Stocks.News does not hold positions in companies mentioned in the article.