Valuation Tracker

Sector Valuation Report – Trump’s Rescheduling Announcement – A Watershed Event for Cannabis

Today, President Trump  announced historic changes in federal cannabis policy: 

• • Rescheduling
    • Directs the Attorney General to complete the rulemaking to move marijuana from Schedule I to Schedule III under the Controlled Substances Act.
    • Anchors the action to the 2023 HHS recommendation, recognizing accepted medical use.
    • Emphasizes expedited completion within existing law.
  • Medical use recognition
    • Explicitly acknowledges that medical marijuana has accepted medical uses.
    • Cites FDA findings supporting use for pain, nausea and vomiting, and anorexia related to medical conditions.
    • References widespread state-level medical programs and millions of registered patients.
  • Research expansion
    • Prioritizes expansion of medical marijuana research.
    • Calls for real-world evidence and practical clinical models.
    • Focuses on safety, efficacy, dosing, and long-term effects.
    • Highlights gaps in physician guidance and patient disclosure.
  • CBD and hemp-derived products
    • Addresses regulatory gaps for hemp-derived cannabinoids, especially CBD.
    • Directs work with Congress to update definitions affecting full-spectrum CBD.
    • Seeks clearer federal standards, more accurate labeling, and stronger consumer safeguards.
    • Contemplates THC per-serving and per-container limits.
  • Public health framing
    • Positions the action as improving care for chronic pain patients, seniors, and veterans.
    • Notes potential opioid-reduction effects among medical marijuana users.
    • Emphasizes risk management for seniors and polypharmacy patients.
  • Paradoxically, the cannabis stock market was down sharply on the news. The chart below shows the percentage increase in prices during the week ended 12/12/25 (blue bars), the percent decline from 12/12/25 to 12/18/25 (red bars), and the resulting net gain over the period (green bars)
  • Note that despite today’s sharp reversal, all stocks except Jushi are up over the full period.

• • But why the sharp reversal today on ostensibly the best news cannabis has had in many years?
    • One explanation can be summarized by the old Wall Street adage, “Buy on the Rumor, Sell on the News.” The rescheduling announcement had been priced in over the last week, and there was little surprise when it finally happened. Retail traders may have been anxious to harvest the only significant gains they had seen in their cannabis portfolios.
    • Today’s announcement did not reschedule cannabis. There was no final rule. Instead, he instructed Bondi to proceed as rapidly as feasible toward rescheduling. Observers who expected a final ruling may have been disappointed.
    • There had been several rumors circulating that the executive order would include provisions on SAFE banking, but it did not.
    • Finally, the positive comments directed toward hemp-based cannabinoids may have thrown a life raft to the hemp industry, and that may be unpopular in some legal cannabis circles.
    • We believe that further price gains will occur as the timing and details of the process become clearer.