Investors Bet on Federal Rescheduling and Medicare CBD Coverage

Published on November 3, 2025

Market Surge Fueled by Policy Optimism

NEW YORK — U.S. cannabis stocks are soaring as investors anticipate a more favorable federal landscape under the incoming Trump administration. Coined the "Trump effect," this wave of optimism is driven by signals of support for Medicare coverage of CBD products, accelerated marijuana rescheduling, and bipartisan efforts to regulate intoxicating hemp derivatives. Major cannabis companies saw share prices jump up to 15% in late October 2025, breathing new life into a sector projected to reach $50 billion in annual sales by year-end.¹

Key Catalysts: Rescheduling, Hemp Reform, and Medicare

President Trump has publicly endorsed Medicare reimbursement for CBD to treat chronic pain in seniors and veterans, stating in a November 1, 2025, interview: "CBD helps without the high—Medicare should cover it for our elderly and vets."¹ This aligns with the Department of Health and Human Services (HHS) recommendation to reclassify cannabis from Schedule I to Schedule III, a process the DEA is expected to finalize in the second half of 2026.²

Meanwhile, Congress is pushing to resolve the Farm Bill impasse, with provisions to regulate delta-8 and delta-9 THC products under a unified framework—potentially stabilizing a $30 billion hemp market plagued by legal gray areas.³ Former Rep. Matt Gaetz (R-FL), a vocal rescheduling advocate, remarked, "2026 could be the year we finally unlock federal reform."³

Corporate earnings reflect underlying strength: Verano Holdings posted $203 million in Q3 2025 revenue, while Curaleaf and Trulieve prepare Q3 reports in mid-November.¹ Tilray Brands’ CEO expressed confidence in policy-driven growth, despite a 10% YTD decline in cannabis ETFs.¹

State-Level Dynamics and National Trends

States are responding to market pressures: Michigan lawmakers are debating license caps and tax increases to combat black-market competition, while California recently cut its cannabis excise tax by 25% to support legal operators.⁴ In Massachusetts, an anti-legalization group faces fraud allegations over deceptive petition signatures for a 2026 recriminalization ballot.⁵

Nationally, 12 states—including Wisconsin, Pennsylvania, and Indiana—are poised to advance medical or decriminalization measures in 2026 legislative sessions.⁶ A January 2025 data breach at STIIIZY exposed 380,000 customer records, underscoring rising cybersecurity risks in the industry.⁷

Scientific and Regulatory Developments

European clinical trials published in October 2025 confirmed cannabis oils effectively manage chronic low back pain with fewer addiction risks than opioids.⁸ The National Institute on Drug Abuse (NIDA) released a 2025–2030 research roadmap prioritizing product safety, potency standardization, and public health impacts of policy changes.⁹

Banking reform via the SAFER Banking Act remains stalled, but industry leaders expect movement in 2026. The National Law Review predicts the Supreme Court may take up interstate commerce challenges in 2026, with rulings potentially by 2027.¹⁰

Industry Outlook: Cautious Optimism

At the Business of Cannabis New York Summit on November 6, 2025, executives emphasized adaptability: "Rescheduling could trigger a wave of M&A and open interstate trade," one panelist noted.¹¹ In Florida, the Smart & Safe campaign is suing election officials over 2024 ballot irregularities, while Nebraska and North Dakota regroup after failed 2024 initiatives.⁵

New York is considering THC potency caps, and California’s CAURD program now offers equity grants up to $30,000.⁷ Minnesota issued its first on-site cannabis consumption lounge license in October 2025, signaling a shift toward experiential retail.¹²

Conclusion

The "Trump effect" has injected momentum into cannabis markets, but sustained growth hinges on federal action. Will 2026 deliver rescheduling and banking reform, or will delays temper the rally? Share your predictions below.

Monitor DEA announcements and congressional Farm Bill negotiations for updates.

References

1. CNBC, "'Trump effect' raises hopes for cannabis rally as investors bet on federal reforms, softer marijuana stance," November 1, 2025. Link
2. Marijuana Moment, "DEA rescheduling timeline update," October 2025 (projected finalization H2 2026).
3. Marijuana Moment, "Hemp dispute threatens bill to end federal shutdown (Newsletter: October 30, 2025)," October 30, 2025. Link
4. Detroit Free Press, "Michigan's cannabis market is on the verge of a shake-up with new tax, license cap proposal," October 29, 2025. Link
5. Marijuana Moment, "Anti-cannabis campaign accused of petition fraud (Newsletter: November 3, 2025)," November 3, 2025. Link
6. Cannabis Business Times, "12 States That Could Legalize Cannabis in 2026," updated November 2025. Link
7. ArentFox Schiff, "Top 10 Issues in the Cannabis Industry for 2025," March 26, 2025 (updated Q4). Link
8. NPR, "Cannabis works for back pain, in new studies," October 20, 2025. Link
9. NIDA, "A new roadmap for cannabis and cannabis policy research," January 13, 2025. Link
10. National Law Review, "Predictions: 2026 to Be a Pivotal Year in Cannabis," projected November 2025.
11. mg Magazine, "Business of Cannabis Returns to New York for 2025 Summit," September 29, 2025. Link
12. Minnesota Office of Cannabis Management, "First On-Site Consumption License Issued," October 2025.