Cannabis sector shares jumped on Friday, after reports that the Trump administration is preparing to reclassify marijuana as a Schedule III drug at the federal level. The move, reported by The Washington Post and Axios, would mark a significant step toward nationwide decriminalization by easing the regulatory framework around the substance, currently listed as Schedule I, alongside drugs such as heroin.

Tilray Brands shares surged over 30% in pre-market trading on Wall Street open, while Innovative Industrial Properties was up over 6%. Another big winner was The Amplify Seymour Cannabis ETF (CNBS), which groups several sector names, which increased more than 28%. According to Axios, the reclassification could come as early as 2026 and would pave the way for tax benefits, greater investor appeal, and a normalized legal framework for companies operating in the industry.

Although Donald Trump already floated the reform in August, the converging signals are strengthening market expectations this time. The sector, which has benefited from a gradual loosening of state-level laws, has struggled on the stockmarket so far: Tilray shares, for instance, were still down 36% YTD before Friday's rebound. A federal reclassification would be a major turning point for an industry seeking stability and institutional recognition.