Cannabis company stocks skyrocketed Tuesday following multiple reports marijuana will be reclassified to a less dangerous drug schedule, which could broaden the substance’s medical usage and cut down regulations tied to it.
Cannabis stocks surged more than 30% Tuesday. (Photo by Christopher Furlong/Getty Images)
Canada-based Canopy Growth Corporation shares surged more than 65%, closing at $14.88, its highest closing price of the year.
Tilray Brands opened at $1.77, rocketed more than 35% through trading and closed at $2.47.
Several other cannabis companies’ shares spiked Tuesday including Aurora Cannabis (+46%), Amplify Alternative Harvest (+26%) and Trees Corporation (+26%).
The stock jumps come after news the Drug Enforcement Agency will propose the reclassification of marijuana from a Schedule I drug to a Schedule III drug, which the federal government says can be used with a prescription.
Marijuana currently shares the same schedule as drugs like heroin, ecstasy and LSD despite being legal in several states.
The reclassification of marijuana would be the first time in 50 years the drug would receive a different designation and the first time the federal government would acknowledge marijuana’s medical benefits, NBC reported.
The DEA’s proposal for a less stringent designation for marijuana still requires review from the White House Office of Management and Budget once submitted, according to the Associated Press, which first reported the news. The DEA will take public comment on the proposal if it’s approved by the White House, the AP noted, citing five people familiar with the matter. The DEA referred Forbes’ request for confirmation of the proposal to the Department of Justice, which declined to comment.
Though reclassification of marijuana would not result in legalization at the national level, the change could bring about lower tax rates for the cannabis industry and result in less restrictions on scientific marijuana studies. The Department of Health and Human Services recommended the DEA move marijuana to a less harsh drug schedule in August, also resulting in a stock surge among the same cannabis companies that reacted positively to the reclassification news Tuesday.
Biden Administration Moving Marijuana To Less Severe Drug Class—Boosting Medical Uses, Reports Say (Forbes)
Cannabis Stocks Surge After HHS Recommends Classifying Marijuana As Lower-Risk Drug (Forbes)
