Roundhill Cannabis ETF Surges on Trump’s Regulatory Shift

The Roundhill Cannabis ETF (BATS:WEED) has experienced a notable surge in momentum, with its ranking jumping to the 89th percentile this week. This increase is closely linked to renewed optimism surrounding federal cannabis reform, particularly following President Donald Trump’s recent executive order advocating the rescheduling of marijuana.

According to data from Benzinga Edge, the momentum score for the Roundhill ETF reached an impressive 89.25, positioning it significantly ahead of many of its industry peers. For comparison, Aurora Cannabis Inc. (NASDAQ:ACB) lags with a momentum score of just 21.25. This shift reflects a growing investor confidence in the cannabis sector, as the ETF demonstrates strong performance in terms of recent price movements.

Short-Term Gains Amid Long-Term Concerns

Despite the positive short-term momentum, the technical outlook for the Roundhill ETF remains complex. While the ETF exhibits favorable trends in the short and long terms, the medium-term performance has been less encouraging. Data from Benzinga Edge’s Stock Rankings indicates that the ETF has faced challenges over the last few quarters.

Dan Ahrens, portfolio manager of the AdvisorShares Pure US Cannabis ETF (NYSE:MSOS), emphasized the need for caution. He noted that while the recent news is promising, the sector continues to experience volatility and investors should prepare for a “multi-leg process” rather than expecting immediate solutions.

Regulatory Changes Propel Market Interest

The primary factor driving this upward momentum is the evolving regulatory landscape surrounding cannabis. President Trump’s initiative to move cannabis to Schedule 3 is being hailed as the “most consequential federal cannabis policy shift” in the past 50 years. Currently, cannabis businesses are subject to Section 280E, a regulation designed for narcotics traffickers that restricts them from deducting standard business expenses, such as rent or payroll.

A transition to Schedule 3 would alleviate this financial burden, potentially transforming the profitability landscape for U.S. cannabis operators.

Despite this strong rally, the Roundhill ETF has faced challenges in 2026, showing a decline of 4.72% thus far. Nevertheless, it has recorded substantial growth over the past six months, rising by 61.50%, and has increased by 26.17% over the last year. On Tuesday, the ETF closed at $19.38, reflecting a decrease of 5.23% for the day.

The current momentum of the Roundhill Cannabis ETF illustrates the dynamic nature of the cannabis market, driven by both regulatory changes and investor sentiment. As the landscape continues to evolve, stakeholders will be closely monitoring developments that could impact the sector’s future.