Canopy Growth Corp. (NASDAQ:CGC) shares surged Friday morning following reports that President Donald Trump is preparing to ease federal restrictions on marijuana.
What’s Driving the Move:
The rally began after a Washington Post report indicated that Trump plans to direct federal agencies to reclassify marijuana as a Schedule III substance.
This potential shift carries major financial implications. Cannabis is currently grouped with high-risk drugs such as heroin under Schedule I—a classification that subjects cannabis companies to steep and limiting tax rules. By moving marijuana to Schedule III, which includes medications such as certain steroids and Tylenol with codeine, Canopy Growth would fall under a different tax framework. Investors expect this change to lift significant financial burdens and materially benefit the company’s profitability.
Beyond tax relief, reclassification could draw more institutional investment into the cannabis market, giving Canopy and its peers improved access to funding. According to Axios, the policy change could be implemented early next year, offering investors a clearer timeline.
The rally extends across the sector, with companies like Tilray and Aurora posting gains as well. But CGC’s jump reflects growing optimism that cannabis businesses may soon operate under a more traditional, pharmaceutical-style regulatory environment rather than the constraints tied to illicit substances.
CGC Price Action:
At publication time Friday, Canopy Growth shares were up 37.2% to $1.55.
The stock also sits about 9.7% above its 200-day moving average of $1.27, signaling strength relative to its longer-term performance trend.