Move aside April 20, also known as “420 Day.” The cannabis industry now has a more important date to celebrate – Dec. 18.
Last Thursday, Dec. 18, 2025, President Donald Trump issued an executive order calling for the reclassification of marijuana from a Schedule I classification to a Schedule III classification. Michael Bronstein, President of the American Trade Association for Cannabis and Hemp, called the decision “the most significant federal shift in cannabis policy in over 50 years.”
As you might expect, President Trump’s move has significant implications for cannabis companies. But are three of the biggest marijuana stocks, Green Thumb Industries(OTC: GTBIF), Tilray Brands(NASDAQ: TLRY), and Trulieve Cannabis(OTC: TCNNF), now no-brainer buys?
Image source: Getty Images.
Former President Richard Nixon signed the Controlled Substances Act into law in 1970. It classified marijuana as a Schedule I drug, which meant it was found to have “no currently accepted medical use and a high potential for abuse.”
President Trump’s recent executive order directs Attorney General Pam Bondi to “take all necessary steps” to reschedule marijuana to Schedule III. This schedule is defined as “drugs with a moderate to low potential for physician and psychological dependence.”
This action recognized that marijuana has legitimate medical uses, making the Schedule I classification inappropriate. It also reflected the reality that 40 U.S. states, three territories, and the District of Columbia have legalized the use of medical cannabis.
Importantly, though, marijuana remains illegal at the federal level in the U.S. Trump emphasized that his executive order “doesn’t legalize marijuana in any way, shape, or form, and in no way sanctions its use as a recreational drug.”
Green Thumb, Tilray, and Trulieve will be affected in several positive ways by the reclassification of marijuana. The CEOs of all three companies praised the Trump administration’s decision.
Perhaps the most critical impact for Green Thumb, Tilray, and Trulieve is that they will be exempt from IRS Code Section 280E. This section of the IRS code prevents companies in the cannabis industry from deducting some business expenses, including payroll and rent.
Exemption from Section 280E could boost the profits of cannabis companies. What companies do with this extra money could have far-reaching consequences as well. For example, they could increase their marketing efforts, which could drive both revenue and profits higher.
The reclassification of marijuana to Schedule III may also lead to expanded access to financial services. Some banks have been reluctant to work with cannabis companies in the past due to the legal murkiness with marijuana being legal in many states but illegal at the federal level.
In addition, Trump’s move could attract more investors to marijuana stocks. Reclassification is already spurring greater investment in one way. Tilray announced plans to expand its U.S. medical cannabis operations following the White House’s announcement related to rescheduling marijuana.
Rescheduling marijuana is, without question, a significant milestone for the U.S. cannabis industry. Does it make Green Thumb, Tilray, and Trulieve stocks no-brainer buys? No.
For example, Tilray is currently unprofitable. The Canadian company posted a net loss of $793.5 million in the third quarter of 2025. Trulieve is also unprofitable, with the Florida-based company recently reporting a Q3 net loss of $27 million.
Green Thumb’s valuation could be an issue for some investors. The Illinois-based cannabis operator’s shares trade at a forward price-to-earnings ratio of 34.6.
Each marijuana stock must be viewed on its own merits, with all factors taken into consideration. Marijuana reclassification is an important factor, but it’s not the only one.
Before you buy stock in Green Thumb Industries, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Green Thumb Industries wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $509,039!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,109,506!*
Now, it’s worth noting Stock Advisor’s total average return is 972% — a market-crushing outperformance compared to 193% for the S&P 500. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
Keith Speights has no position in any of the stocks mentioned. The Motley Fool recommends Green Thumb Industries and Tilray Brands. The Motley Fool has a disclosure policy.
SummaryMark Zandi says official US CPI data significantly understates inflation.Moody’s Analytics estimates November inflation remained near 3%, not 2.7% (Goldman Sachs share concerns) Measurement...
