President Donald Trump Just Fast-Tracked the Rescheduling of Marijuana, and Pot Stocks Plunged -- Here's the Nefarious Reason Why | The Motley Fool

In the 11 months since President Donald Trump was inaugurated for his non-consecutive second term, change has been commonplace. Since taking office, Trump has overseen the passage of his flagship tax and spending law, the "big, beautiful bill," introduced his sweeping global tariff and trade policy , and made an assortment of adjustments to Social Security, including the signing of an executive order (EO) that ended the use of paper checks to dole out benefits . Last week, the president oversaw the next of what's been a series of historic changes in Washington, D.C. On Thursday, Dec. 18, he signed an EO ("Increasing Medical Marijuana and Cannabidiol Research") designed to fast-track the ongoing review by the U.S. Food and Drug Administration (FDA) to reclassify marijuana from a Schedule I substance to Schedule III under the Controlled Substances Act (CSA). President Trump signing paperwork in the Oval Office. Image source: Official White House Photo by Shealah Craighead, courtesy of the National Archives. The president's EO follows a 2023 recommendation from the Department of Health and Human Services that cannabis be adjusted to a Schedule III substance under the CSA. This reclassification would open new channels for medical marijuana research, as well as benefit publicly traded pot stocks (I'll detail these benefits later). But when Trump signed this groundbreaking EO, cannabis stocks plummeted. Trulieve Cannabis ( TCNNF 0.12%) lost 24% of its value on Dec. 18, with Curaleaf ( CURLF 5.48%), Cresco Labs ( CRLBF +8.33%), and Green Thumb Industries ( GTBIF +2.00%) shedding 32%, 39%, and 17%, respectively. Canadian licensed producers followed suit, albeit to a lesser degree, with Canopy Growth ( CGC 12.43%) losing 12%. It's not the reaction you'd expect for such a long-awaited moment for the cannabis industry -- yet there's a good reason why this sell-off occurred. Pot stocks are plunging on the fast-tracked reclassification of cannabis -- and for good reason On the surface, Trump's EO appears to be a win for the cannabis industry. For 55 years, marijuana has been listed next to heroin and LSD, among other drugs, as having no medical benefits under the CSA. This EO establishes the legitimacy of cannabis as having medical benefits and paves a path forward for patients to potentially gain easier access to cannabidiol (CBD)-based therapies. However, this major leap forward for medical cannabis comes with an equally devastating setback for those hoping to see recreational marijuana become legal at the federal level. According to President Trump: It [the EO] does not legalize marijuana in any way, shape, or form or in no way sanctions its use as a recreational drug... It's never safe to use powerful controlled substances in a recreational manner. So, unless a drug is recommended by a doctor for medical reasons, just don't do it. In other words, while the president was offering a lifeline to companies engaged in the production and sale of medical marijuana, he pulled the rug out from under those banking on an eventual easing of restrictions for recreational...

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