Overview

• President Trump confirmed on August 11 that his administration is reviewing a proposal to move marijuana from Schedule I to Schedule III and expects to decide within weeks
• The announcement followed reports that Trump discussed reclassification at a New Jersey fundraiser attended by cannabis industry figures, including Trulieve CEO Kim Rivers
• Cannabis stocks and exchange-traded funds climbed as much as 25% after investors bet on lower regulatory and tax burdens from a potential downgrade
• Under the Controlled Substances Act only the attorney general and DEA administrator can finalize scheduling changes, and the process has been on hold since March amid procedural disputes and an interlocutory appeal
• A move to Schedule III would not federally legalize marijuana but would reduce criminal penalties, expand research access and ease tax and banking restrictions for legal cannabis businesses