What it means for seniors, research, stocks

President Donald Trump is expected to sign an executive order this week that would broadly expand access to cannabis. Industry advocates, executives and researchers who spoke to CNBC said the changes would come with big implications for both consumers and the health care industry.

Trump said Monday he’s “strongly” considering an executive order that would reclassify pot as a Schedule III drug under the U.S. Drug Enforcement Agency, which would place cannabis alongside Tylenol with codeine, rather than Schedule I with the likes of heroin and LSD, as it’s classified now. The order would also authorize a pilot program allowing Medicare to cover cannabis products for seniors.

The proposal is expected to apply specifically to cannabidiol products, better known as CBD, aimed at treating chronic pain, sleep deprivation, and other age-related ailments, said Shawn Hauser, a partner at cannabis-focused law firm Vicente LLP.

CBD has spiked in popularity in recent years, moving into the mainstream via canned cocktails and body lotions, but has yet to win full-throated backing from federal drug regulators.

“I expect the executive order will make clear what kind of cannabinoids are covered, that they have to come from a federally legal source,” Hauser told CNBC.

While many in the cannabis industry view the shift to Schedule III as a done deal, the inclusion of a controversial Medicare provision adds an extra wrinkle that could embed cannabis-derived products into the U.S. health-care system, despite limited clinic evidence of their efficacy, some experts told CNBC.

Insiders like Hauser expect the final order to define legal cannabinoids, administrative methods and a framework for Food and Drug Administration oversight.

“A lot of people want to see it, the reclassification, because it leads to tremendous amounts of research that can’t be done unless you reclassify,” Trump told reporters Monday. “So we are looking at that very strongly.”

Rescheduling and Medicare coverage are likely to trigger new investments from institutional capital and investors that typically follow federal insurance coverage to big pharmaceutical companies, said Timothy Seymour, founder and chief investment officer of Seymour Asset Management and a CNBC contributor.

“The valuation of the sector will be worth a lot more because institutional investors will be allowed in, will have access and will have liquidity, and exchanges will trade them,” Seymour told CNBC. “That immediately could double or triple the sector.”

The push for reclassification comes as a 2024 report found that more Americans reported using marijuana daily, or near-daily, than reported drinking alcohol at the same frequency. It was the first time the share of daily use had flipped in marijuana’s favor, based on analysis of 40 years…