Trump’s Post Just Sent Cannabis Stocks Soaring

It was President Donald Trump’s social feed that lit the spark on cannabis stocks this past week.

On Sunday, Trump posted a video on Truth Social highlighting the potential health benefits of hemp-derived CBD for seniors. He even floated the idea that Medicare could cover it one day.

The post came on the heels of another Trump remark just weeks ago that he was considering reclassifying marijuana at the federal level, downgrading it from its current Schedule 1 classification (the same category as heroin).

Trump’s twin comments set off a frenzy in cannabis stocks, so what comes next?

Key Points

• Cannabis stocks surged after Trump posted a video promoting CBD’s health benefits for seniors.

• Marijuana could be reclassified federally, fueling speculation of policy change.

• With tiny market caps, these stocks remain highly volatile and thinly traded.

Market Jumps, Then Pullbacks

Tilray Brands stole the spotlight, rocketing by over 40% in just days.

But these swings weren’t simply about optimism. They also reflect just how thinly traded and volatile these stocks have become. For example, Aurora Cannabis, once a $10 billion company at its peak in 2018, now carries a market cap of 95% lower.

Notably, Tilray and Aurora managed to hold onto part of their gains into this week, while Canopy and Cronos quickly gave theirs back, a reminder of just how fragile sentiment is in this sector.

The Bigger Picture Is A Market With Room to Grow

Research firm Grand View Research already projected the U.S. cannabis market to nearly double to $74 billion by 2030. But context matters, that $74 billion by 2030 would still make cannabis smaller than the U.S. pet care market, which already surpassed $140 billion globally in 2023.

Still, there’s a unique angle here. Unlike many consumer categories, cannabis sales remain bottlenecked by regulation.

Any federal move to reclassify or legalize could instantly unlock new pools of demand and capital access, potentially accelerating growth beyond today’s forecasts.

ETFs Are A Safer Way to Play?

Given the risks of individual cannabis stocks, thin balance sheets, high cash burn, and reliance on dilutive financings, some investors are turning to ETFs for exposure. This week, several cannabis ETFs logged double-digit gains:

Amplify Alternative Harvest ETF (MJ) jumped by over 17%, helped by its large Tilray stake.  MSOS gained almost 12%. It’s actively managed and primarily uses total return swaps to gain exposure, a detail most retail investors overlook, but one that introduces counterparty risk and fees.

AdvisorShares YOLO ETF climbed 11% but the twist is nearly 40% of its holdings are in MSOS, meaning investors are doubling down on the same basket of names.

Here’s an interesting point, because these ETFs sometimes hold each other, there’s a “layering” effect. A rally in Tilray, for example, can ripple through multiple ETFs at once, exaggerating price moves.

So, Now What?

Trump’s posts may have been the spark, but the cannabis sector’s firepower remains tied to regulatory change. Without meaningful federal reform, many of these companies will struggle with capital access, interstate restrictions, and profitability challenges.

That said, the setup is intriguing for investors with a high risk tolerance. The sector is beaten down, expectations are low, and even small political signals can trigger double-digit swings.

For long-term investors, the safer play may be cannabis ETFs, which spread risk and mitigate the downside of betting on single distressed names. But make no mistake, this remains a high-volatility corner of the market where fortunes can be made, or lost, overnight.