Canopy Growth Corporation stock is back in the spotlight on December 15, 2025, as the cannabis sector reacts to a fresh wave of reporting that President Donald Trump may soon move to ease federal marijuana restrictions—specifically by reclassifying cannabis as a Schedule III drug under U.S. law. In early European trading on Monday, Canopy Growth led the group, jumping as much as 17.9% and extending a dramatic rally from the prior session. [1]
For investors, traders, and anyone trying to separate “real policy catalyst” from “market caffeine,” the key story today is simple: CGC is moving hard because U.S. federal reform headlines are moving hard. The harder part is what that means for the company’s fundamentals—and what a Schedule III shift would (and wouldn’t) change.
What’s happening with Canopy Growth stock today
The current rally follows an explosive end to last week. On Friday, Dec. 12, 2025, Canopy Growth (NASDAQ: CGC) closed at $1.74, up 53.98% on the day, with trading volume surging to roughly 157.5 million shares—a massive spike versus typical activity. [2]
By Monday morning in Europe, the momentum continued. Reuters reported Canopy shares rising sharply again—after the stock had already posted an outsized gain on Friday—amid speculation that federal rules could loosen soon. [3]
This kind of price action is a classic cannabis-stock pattern: policy headline → sector-wide squeeze → extreme volume → follow-through (or whiplash). The question is whether the policy headline is real, imminent, and actionable—or just market fuel.
The catalyst: Trump rescheduling talk and why it matters
Multiple major outlets have reported that Trump is likely to issue an executive order tied to reclassifying marijuana from Schedule I to Schedule III—a shift that would reduce the drug’s regulatory severity at the federal level. [4]
Market reaction has been intense because a Schedule III move is widely seen as a potential economic relief valve for cannabis operators, in particular due to U.S. tax policy. Barron’s noted that rescheduling could ease the industry’s tax burden under IRS Section 280E, a rule that has historically limited deductions for businesses trafficking in Schedule I/II substances. [5]
At the same time, it’s not a done deal. Barron’s also reported that a White House official indicated no final decision had been made—a crucial caveat when markets are sprinting ahead of official paperwork. [6]
Schedule III: what changes… and what doesn’t
A move to Schedule III would be meaningful, but it’s not a magic wand that instantly “legalizes cannabis” across the U.S. It’s better to think of it as changing the federal risk and cost structure rather than flipping the legality switch.
Here’s the practical implication investors are trading right now:
- Tax relief potential (280E): Widely viewed as one of the biggest economic wins for operators if cannabis is no longer treated as Schedule I/II for 280E purposes. [7]
- Financing and institutional access: Reuters highlighted that the sector has been constrained by federal restrictions that limit traditional banking and investment flows, and that a reclassification could ease some of those pressures. [8]
- Medical/pharma pathway: TD Cowen’s Jaret Seiberg told Reuters he believes rescheduling could help the industry by enabling broader pharmaceutical use and distribution dynamics over time. [9]
And what doesn’t automatically happen:
- Recreational cannabis is not instantly federally legalized.
- State-by-state market fragmentation doesn’t vanish overnight.
- Execution details matter: timing, agency implementation, enforcement posture, and follow-on rulemaking can be slow and politically messy.
In other words, Schedule III is a structural catalyst, not a guaranteed near-term revenue explosion.
Why Canopy Growth (CGC) specifically is so sensitive to U.S. policy headlines
Canopy Growth is a Canada-based cannabis company (also traded on the TSX under WEED) with a strategy that aims to participate in U.S. THC upside through an ecosystem structure.
In a September 2025 Business Wire release, Canopy described its U.S. positioning via a non-controlling interest in Canopy USA, whose portfolio includes Acreage Holdings and brands such as Wana (edibles) and Jetty (extracts), among others. [10]
That structure matters because U.S. federal reform—whether via rescheduling, enforcement changes, or other rule shifts—can change the value of U.S.-linked assets, the financing environment around them, and the strategic options available to companies trying to build cross-border cannabis exposure.
So while CGC isn’t “a U.S. multi-state operator in disguise,” it trades like a high-beta proxy for U.S. reform optimism—especially when headlines suggest movement at the federal level. [11]
The fundamentals check: Canopy’s latest earnings picture
Beyond the policy-driven rally, Canopy has been working through a multi-year effort to stabilize financial performance, focus on core categories, and reduce debt.
In its Nov. 7, 2025 earnings release for Q2 fiscal 2026 (quarter ended Sept. 30, 2025), Canopy reported:
- Canada adult-use cannabis net revenue of $24 million, up 30% year-over-year
- Canada medical revenue up 17% year-over-year
- $298 million in cash and cash equivalents, which the company said exceeded debt balances by about $70 million at quarter-end
- An Adjusted EBITDA loss of $3 million, described as an improvement versus the prior year period [12]
Those results matter for one big reason: even in a hype-driven rally, the market eventually re-anchors to whether the company can sustain liquidity and shrink losses while waiting for any U.S. reform tailwind to become real and monetizable.
Balance sheet moves: debt prepayment and interest savings
Canopy has also highlighted debt reduction steps in 2025. In a Sept. 15, 2025 release, the company announced an early US$25 million prepayment against its senior secured term loan and said aggregate prepayments totaling US$50 million were expected to reduce annual cash interest expense by US$6.5 million. [13]
In a sector where many companies have struggled under high-cost capital, the market generally treats interest savings as meaningful—especially when reform uncertainty can stretch timelines and force operators to survive longer than they’d like.
Forecasts and analyst outlook: “Hold” consensus, wide target dispersion
Analyst sentiment on Canopy remains mixed—often neutral-leaning with a lot of “show me” energy.
MarketScreener’s consensus snapshot (as surfaced in current market summaries) lists:
- Mean consensus: HOLD
- Number of analysts: 5
- Average target price: 3.25 CAD
- High target: 8.00 CAD
- Low target: 1.40 CAD [14]
Investing.com similarly shows a neutral-style consensus view with an average price target around 3.25 (with the same high/low range). [15]
Two important notes for readers:
- Targets vary wildly in cannabis because the sector’s valuation is extremely sensitive to regulatory assumptions. A model that assumes meaningful U.S. reform can look like a different universe than one that assumes a slow grind.
- Pay attention to currency and listing. Some targets are framed around TSX pricing (CAD), some around Nasdaq (USD), and not every aggregator handles that cleanly.
The “mechanics” behind the spike: short interest and options activity
The violent speed of the move has also made traders talk about positioning mechanics—short covering and options flows.
MarketBeat reports that as of Nov. 14, 2025, Canopy had short interest of 43.56 million shares, representing 18.19% of the public float, with a short interest ratio (days to cover) of about 2.0. [16]
That doesn’t guarantee a short squeeze, but it helps explain how a policy headline can produce an outsized move: when a lot of people are leaning one way, it doesn’t take much to knock the first domino.
Options activity has also been elevated. A MarketBeat report dated Dec. 13, 2025 said traders bought about 43,864 call options, roughly 77% above typical daily call volume—another signal of speculation piling in around the headline cycle. [17]
Next key date: Canopy’s next earnings window
For investors trying to avoid living entirely inside a rumor tornado, the next fundamental checkpoint is the company’s next earnings.
Canopy’s investor events page lists a tentative date for Q3 FY26 earnings: February 6, 2026, with the usual note that dates are subject to change until confirmed. [18]
Between now and then, the tug-of-war will likely be:
- Policy probability (does rescheduling happen, and on what timeline?)
- Liquidity and cash burn (can the company keep improving the trajectory?)
- Category execution in Canada and medical (where real revenues exist today)
- U.S. optionality value (how the market prices Canopy USA-related exposure)
Risks to keep front-of-mind (because cannabis stocks love chaos)
The December rally is real—but so is the sector’s habit of giving back gains when timelines slip or details disappoint.
A few risk themes keep showing up in coverage and market history:
- Policy uncertainty risk: even “likely” reforms can stall, dilute, or get delayed.
- Dilution/financing risk: cannabis companies have frequently relied on equity raises; Canopy itself has previously drawn sharp market reactions when announcing large potential share-sale plans. [19]
- Fundamentals vs. momentum: huge volume days can be more about positioning than long-term conviction, and reversals can be fast.
This is the kind of stock where you want to distinguish between:
- “The company improved its operating trajectory,” and
- “The market temporarily repriced the regulatory probability tree.”
Both can be true, but they’re not the same animal.
Bottom line: why CGC is ripping—and what investors should watch next
As of Dec. 15, 2025, Canopy Growth Corporation stock is surging because the market is aggressively repricing the odds of U.S. marijuana rescheduling under Trump—an outcome that could materially change tax and financing dynamics for the cannabis industry. [20]
But the sustainability of the move will likely depend on two things:
- Confirmation and details: official action matters more than chatter, especially after a multi-day surge.
- Company execution: Canopy’s recent results show improving trends in key Canadian segments and ongoing balance-sheet moves, but investors will still demand progress on profitability and durable cash-flow direction. [21]
References
1. www.reuters.com, 2. stockanalysis.com, 3. www.reuters.com, 4. www.reuters.com, 5. www.barrons.com, 6. www.barrons.com, 7. www.barrons.com, 8. www.reuters.com, 9. www.reuters.com, 10. www.businesswire.com, 11. www.reuters.com, 12. www.canopygrowth.com, 13. www.businesswire.com, 14. www.marketscreener.com, 15. www.investing.com, 16. www.marketbeat.com, 17. www.marketbeat.com, 18. www.canopygrowth.com, 19. www.marketwatch.com, 20. www.reuters.com, 21. www.canopygrowth.com
