Core Insights - President Donald Trump is expected to sign an executive order to expand access to cannabis, which could significantly impact consumers and the healthcare industry [1][2] - The order may reclassify cannabis as a Schedule III drug, allowing Medicare to cover cannabis products for seniors, particularly CBD aimed at treating chronic pain and other age-related ailments [2][3] Industry Implications - The proposed changes are anticipated to facilitate research and development in the cannabis sector, as reclassification would ease regulatory barriers [5][15] - Institutional investors are likely to be attracted to the cannabis sector due to the potential for Medicare coverage, which could lead to increased valuations and liquidity in the market [5][6][19] - The U.S. cannabis production value increased by 40% last year, with the global market for cannabis-derived products projected to reach $160 billion by 2032 [18] Regulatory Landscape - The executive order is expected to define legal cannabinoids and establish a framework for FDA oversight, which could legitimize the cannabis sector for institutional investors [4][5] - The Medicare initiative, championed by financier Howard Kessler, aims to gather real-world data on the safety and outcomes of cannabinoids for seniors, bypassing traditional FDA hurdles [9][10] Market Dynamics - Stocks of cannabis companies have already seen significant increases, with Tilray Brands and Canopy Growth shares rising by 44% and 52% respectively, following rumors of the executive order [18] - A Schedule III classification could lead to more cannabis stocks being listed on major exchanges, shifting market sentiment from retail to fundamental cash flows [19][20] Competitive Landscape - The potential for Medicare coverage may attract major pharmaceutical companies, leading to increased competition and consolidation within the cannabis sector [21][23] - Smaller cannabis companies may face challenges as larger pharmaceutical firms have the resources to conduct extensive clinical trials, which could reshape the market dynamics [22][23]