Core Insights - Cannabis stocks experienced a significant surge on December 12, 2025, due to reports of President Trump's plans to ease federal marijuana regulations by reclassifying it to Schedule III from Schedule I, leading to increased investor optimism [1][2] - The potential reclassification could allow cannabis companies to benefit from different tax regulations and encourage further investment, with expectations for the change to materialize early next year [2][4] - The reported policy change is viewed positively by industry experts, as it would facilitate banks in providing services to cannabis-related businesses, with a finalized rule anticipated by summer 2026 [4] Market Performance - Major cannabis ETFs saw substantial gains on December 12, 2025, including Amplify Seymour Cannabis ETF (CNBS) up over 54%, Roundhill Cannabis ETF (WEED) up 55.7%, Advisorshares Pure US Cannabis ETF (MSOS) up 54.3%, Amplify Alternative Harvest ETF (MJ) up 42.8%, Advisorshares Pure Cannabis ETF (YOLO) up 34.5%, and Cambria Cannabis ETF (TOKE) up 20.9% [1][3] - Despite the recent surge, cannabis stocks have faced challenges since the pre-Covid boom, with Tilray (TLRY) shares down approximately 84.4% over the past five years and the MJ ETF declining about 78.9% during the same period [5][6] Industry Outlook - The potential regulatory shift is seen as a step towards normalizing cannabis under federal law, with increasing acceptance and easing regulations in several states [5] - The cannabis industry has shown signs of recovery during Trump's second term, evidenced by a 37% increase in the MJ ETF and a 53.9% surge in the MSOS ETF [6]