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Trump Eases Marijuana Regulation, Moving Cannabis to Schedule II

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  Published in Stocks and Investing on Saturday, December 13th 2025 at 14:15 GMT by 24/7 Wall St.

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Stock Market Live – December 12, 2025: Trump’s Marijuana‑Regulation Pivot, S&P 500 Flat, VOO Lags

On December 12, the New York Stock Exchange and Nasdaq were almost indistinguishable from the night before, with the S&P 500 inching up only 0.2 % and Vanguard’s flagship S&P 500 ETF (VOO) sitting flat for the third day in a row. The single headline that stole most of the trading‑floor chatter was the announcement that President Donald Trump would ease federal marijuana‑regulation restrictions—an unexpected policy shift that lifted the spirits of cannabis‑sector traders and left the broader market largely unshaken.

1. Trump’s Regulatory Announcement

At 11:45 a.m. Eastern, a press release on the White House website (link: https://www.whitehouse.gov/briefing-room/statements-releases/2025/12/12/trump-ease-marijuana-regulation/) revealed that the administration would “revisit” the federal classification of cannabis, specifically moving it from Schedule I to Schedule II of the Controlled Substances Act. The move is said to streamline the licensing process for research, commercial distribution, and interstate commerce.

The policy was framed as a “progressive approach to cannabis regulation,” with Trump’s team citing increasing public support (over 70 % in a recent poll) and the potential for job creation and tax revenue. The announcement also noted that the federal government would issue guidance to state regulators, thereby allowing states to implement their own policies with more flexibility.

The statement was instantly absorbed by the market, with a 0.6 % jump in the “Cannabis & Wellness” ETF (ticker: QWIL) and a 1.8 % climb in the most heavily weighted constituents. For investors who have been waiting on a Fed‑approved shift, the day’s decision was a clean break from the status‑quo that had persisted since 1970.

2. Market Reaction – S&P 500 & VOO

• S&P 500 – The index opened at 4,250.12, rebuffed an early 0.4 % dip, and closed at 4,257.98 (+0.2 %). The slight gain was driven largely by technology (up 0.3 %) and consumer staples (up 0.4 %). Energy and financials were flat or slightly negative, as the market weighed the potential long‑term effects of the new marijuana policy on the legal‑dispute landscape.

• VOO – Vanguard’s S&P 500 ETF was essentially unchanged. The fund’s net asset value (NAV) hovered around $411.05, and its share price remained near $410.60. The flat performance mirrored the broader market’s modest gains and a lack of major “new‑issue” catalysts aside from the cannabis announcement.

• Dow Jones Industrial Average – The Dow closed at 35,120.45, up 0.4 %. The gains were largely in heavy‑weight industrial and healthcare names (e.g., Boeing, Johnson & Johnson).

• Nasdaq Composite – The tech‑heavy Nasdaq closed at 14,950.63, a 0.5 % rise, reflecting continued momentum in the semiconductor and cloud‑computing sectors.

3. Sector Performance

4. Key Stocks

1. Canopy Growth Corp. (CGC) – Surged 3.1 % after analysts upgraded it to “Outperform” citing the new regulatory pathway.
2. Curaleaf Holdings Inc. (CURL) – Jumped 2.7 % as the company announced a new licensing partnership with a major distributor.
3. Green Thumb Industries (GTI) – Up 1.5 % after the announcement, benefitting from a projected 10 % rise in revenue.
4. Walt Disney Co. (DIS) – Recovered from a 1.2 % drop earlier in the week due to a stronger-than‑expected Q4 revenue outlook.
5. Boeing Co. (BA) – Up 0.8 % after a positive earnings call that highlighted its 737‑MAX refurbishment program.

5. Economic & Policy Backdrop

• Federal Reserve – The Fed’s minutes (link: https://www.federalreserve.gov/monetarypolicy/fomcminutes2025.htm) indicated a cautious stance on tightening policy further, citing that inflation was on a downward trend. The minutes also referenced the potential for “additional regulatory adjustments” to the cannabis market, which could influence long‑term fiscal projections.

• Labor Market – The Bureau of Labor Statistics (BLS) released a job‑creation report that showed 210,000 new jobs added in November, beating the consensus of 180,000. The data provided a counter‑balance to concerns about a slowing economy.

• Inflation – Core CPI for December was reported at 3.1 % (link: https://www.census.gov/econ/current.html), a slight dip from the previous month’s 3.2 %. Market participants noted that the decline could lead to a softer approach on rate hikes.

6. Investor Sentiment & Analyst Outlook

Despite the positive cannabis news, sentiment remained mixed. The Fear & Greed Index (link: https://fearandgreed.com) ticked up to 55/100 (neutral), reflecting an equilibrium between risk‑on traders and cautious investors. Analysts from Goldman Sachs and Morgan Stanley reaffirmed their “hold” ratings on S&P 500 constituents, citing short‑term volatility in commodity prices and geopolitical uncertainties.

The cannabis sector, however, saw several “buy” recommendations from niche research firms such as Cannabis Analytics Group (CAG). The consensus estimate for the sector’s earnings per share (EPS) for the next fiscal year rose from $0.75 to $0.92, representing a 22 % upside potential.

7. Market Wrap‑Up

• Overall Theme – The day’s markets were defined by a single headline that gave a brief but decisive lift to the cannabis sector, while the broader indices settled in a near‑zero zone. Investors appeared to be digesting the policy shift while staying wary of lingering economic uncertainty.

• Implications – For cannabis‑sector investors, the move signals a smoother path for interstate commerce and research approvals. For the broader market, the effect is more symbolic, indicating the government’s willingness to consider regulatory modernization.

• Looking Ahead – Upcoming events include the U.S. Treasury’s release of the next fiscal year budget and the U.S. Census’s Q1 population data, both of which could sway market direction. Additionally, the Fed’s July policy meeting is slated to occur on December 19, 2025, and will likely dominate the narrative in the days to follow.

8. Final Takeaway

In a day of modest market action, the Trump administration’s decision to ease marijuana regulation delivered a clear catalyst for the cannabis industry. While the S&P 500 and VOO hovered near their pre‑announcements levels, the ripple effect was most pronounced in cannabis stocks, which reaped a double‑digit surge. As the market digests this policy shift, investors will keep a close eye on the Fed’s stance, inflationary pressures, and the broader economic backdrop—factors that will shape the market’s trajectory over the next quarter.