Marijuana enthusiasts have long dreamed of a world where they are free to light up without fear of law enforcement. Today, they got a step closer to making that dream a reality. Sort of.

Late yesterday, the Washington Post reported that President Trump called House Speaker Mike Johnson, R-La., to discuss issuing an executive order directing federal agencies to explore reclassifying marijuana from a Schedule I drug to a Schedule III drug.

For the total squares reading this, possession and sale of Schedule I drugs like heroin means harsher legal penalties, while government enforcement is more lenient for Schedule III drugs like Tylenol with codeine.

Like, what does that even mean, man?

While such a shift wouldn’t completely decriminalize marijuana, it would open many more doors for the companies that sell it legally. A lower schedule would reduce restrictions on transporting marijuana across state lines, lift the ban on cannabis research, encourage banks to do business with marijuana companies, and allow those companies to deduct business expenses.

That last point may sound totally lame to everyone who just wants to vape in peace, but it’s by far the most important. Federal law prohibits companies that sell Schedule I drugs from deducting things like payroll and marketing costs from their taxes. That keeps expenses high for marijuana companies, forcing them to operate with extremely tight margins—but if that changes, it would be enormously beneficial to their bottom lines.

That’s why marijuana stocks got higher than Snoop Dogg on 4/20 today: Canopy Growth soared 53.98%, Tilray Brands popped 44.13%, Cronos Group gained 14.74%, Aurora Cannabis jumped 18.68%, and SNDL rose 24.86%.

What comes next

Don’t get high on your own supply just yet—there’s still a long way to go before cannabis can be re-scheduled. The Biden administration began exploring a reclassification back in 2022, but the idea has been couch-locked since Trump took office. While today’s news is a step in the right direction, there’s likely months of litigious hearings and political machinations ahead.

Marijuana stocks tend to pop anytime news like this breaks, and slowly sink in the months afterwards when their momentum runs out. So for now, grab some Cheetos, turn on some Pink Floyd, and just relax, man.—MR

🟢 What’s up

• Lululemon traded 9.6% higher after boosting its full-year outlook and announcing its CEO will step down at the end of January.
• Quanex Building Products jumped 9.55% after swinging to a Q4 profit despite lower sales and a flat 2026 outlook.
• UBS rose 1.27% after Swiss lawmakers proposed easing new capital rules.
• Energy company Vivopower International rallied 13.39% after its digital-asset arm inked a $300 million joint venture with South Korea’s Lean Ventures to acquire and hold Ripple Labs shares.
• Rivian Automotive rebounded 12.11% as excitement returned around its custom AI chip and new autonomy features unveiled for future vehicles.

What’s down

• Broadcom slipped 11.43% despite strong Q4 results as its $73 billion AI backlog underwhelmed investors.
• Fermi plunged 33.84% after a $150 million funding commitment for its AI-energy Project Matador collapsed.
• Oracle slid another 4.45% on reports that several OpenAI data centers will be delayed due to material and labor shortages, though the company disputed the claims.
• If SpaceX goes public and popularizes data centers in space, it could spell disaster for Earth-bound power providers like Bloom Energy, which fell 12.85%.
• Roblox declined 6.18% after JPMorgan downgraded the stock on slowing bookings growth, rising margin pressure, and scrutiny from a child-safety lawsuit.

When Polymarket was kicked out of the US just a few years ago, it seemed like prediction markets would fade into obscurity. But the enormous sums of money wagered on the presidential election late last year propelled these companies back into the spotlight, and a friendly White House has only encouraged new contenders to join the fray.

And join they have. It’s unsurprising to see Fanatics, DraftKings, and FanDuel parent company Flutter Entertainment pivot from sports betting to prediction markets, which feels like a natural extension of Robinhood Markets’ mission to gamify investing. But even brokerages like Interactive Brokers and Webull, as well as Crypto.com, have joined the fray.

Now Coinbase, the biggest crypto exchange in the US, plans to showcase its new prediction market next week. That’s only days after Gemini Space Station, the crypto brokerage run by the Winklevoss twins, revealed that it too is creating its own prediction market. Both stocks popped when the news broke, though Coinbase fell 0.58% today, while Gemini tumbled 11.81%.

In fact, there are so many companies unveiling prediction markets that they all joined forces to create a Coalition for Prediction Markets yesterday, dedicated to keeping growth humming as legal challenges around the country continue to accrue.

Our prediction: As long as there’s money to be made in this fast-growing industry, you can bet on new prediction markets continuing to pop up everywhere you turn.—MR

A Christmas miracle arrived early for anyone shopping for homes alongside stocking stuffers: Home prices dropped by 1.4% over the past three months, according to Parcl Labs’ analysis of high-frequency listing data. That means real estate prices have fallen year over year for the first time since mid-2023.

So what’s going on? It largely boils down to mortgage rates, which doubled after the pandemic from the 3% to 7% range as the Federal Reserve began hiking rates.

“The sharp increase in mortgage rates in 2022 and 2023 created an affordability shock: buyers were priced out, sales volumes dropped, and sellers had to adjust expectations,” Parcl Labs co-founder Jason Lewris told CNBC.

For sellers, this “adjustment” didn’t come easy. To entice cash-strapped buyers to make an offer, 18% of sellers slashed their price in November, up 1.3 percentage points from last year. But other sellers, rather than accept this harsh reality, simply yanked their homes off the market. Delistings surged 38% in October year over year and 45% year to date, the highest level of sellers throwing in the towel in three years.

Even though both buyers and sellers have their gripes, the picture varies a lot based on where you live. Parcl found that prices are down annually by 10% in Austin, 5% in Denver, and 4% in both Tampa and Houston. Meanwhile, prices are up 6% in Cleveland, 5% in New York and Chicago, and 3% in Philadelphia.

What’s next? In 2026, many housing forecasts expect a slight increase in prices ranging from 1% to 4%. But since mortgage rates are also anticipated to fall to the low 6% range, monthly housing payments should shrink 1.3%—the first annual drop since 2020.

In other words, the New Year should bring cheery news for both buyers and sellers, proving that the housing market doesn’t have to be a zero-sum game.—JD

Want to learn more about what’s coming next for the housing market in 2026? Sign up for Morning Brew’s Playbook to get the latest on all things real estate.

• President Trump said Kevin Warsh and Kevin Hassett are his top picks to replace Jerome Powell next year.
• Bank of America shares have finally fully recovered from the 2008 financial crisis.
• Here’s how housing stocks could make a major comeback in 2026.
• Interactive Brokers is now allowing retail investor accounts to be funded by stablecoin.
• In more crypto news, US regulators just gave crypto firms initial approval to establish national trust banks.
• One more dispatch from crypto-land: Terraform Labs co-founder Do Kwon was sentenced to 15 years in prison for the fraud that caused Terraform’s implosion back in 2022.

Next week is full of juicy economic reports well worth keeping an eye on. We’ll start with the home builder confidence index on Tuesday, then switch gears for the delayed US jobs report from November on Wednesday. We’ve also got October US retail sales on Wednesday, as well as flash services and manufacturing PMI reports from S&P.

After that, we turn our attention to November CPI and weekly initial jobless claims on Thursday, followed by existing home sales and a final reading of consumer sentiment for December on Friday.

The week before Christmas isn’t known for its big earnings news, but there are still a few companies to watch:

Tuesday: Lennar

Wednesday: Micron Technology and General Mills

Thursday: Nike, FedEx, KB Home, BlackBerry, CarMax, Accenture, Cintas, and Birkenstock

Friday: Carnival Corp., Paychex, Conagra Foods, and Lamb Weston