Cannabis stocks surge after HHS recommends classifying Marijuana as lower-risk drug
Cannabis Stocks Surge as Department of Health Recommends Rescheduling, Offering Hope to Industry.
Cannabis companies are rallying for their second day in a row after the Department of Health and Human Services recommended moving marijuana to a less harsh drug schedule—as the drug currently shares the same federal classification as heroin, ecstasy and LSD despite being legal in many states.
Publicly traded companies throughout the cannabis industry reached year-to-date highs after Bloomberg reported the Drug Enforcement Administration received an HHS letter recommending marijuana be rescheduled to a Schedule III drug.
Rescheduling would not fully legalize the drug nationwide, but it would classify it as a substance with moderate to low abuse potential, resulting in less restrictions on scientific marijuana studies and aiding the cannabis industry with lower tax rates.
Pharmaceutical cannabis firm Tilray Brands, which sports a $2 billion market cap, saw its share price climb 11.2% on Thursday and close at $2.96, after trading as low at $1.52 just two months ago.
New York-based Curaleaf Holdings’ stock shot up more than 20% Thursday and closed at $3.75, one of its highest trading peaks of the year.
Shares of Green Thumb Industries, a Chicago-based cannabis retailer, reached their highest levels of the year after closing up 11% at $9.30.
Canopy Growth Corporation rocketed up more than 30%, closing at $0.60—though the company is still trading well below the $3.14 share price it boasted earlier this year.
What to watch for
The DEA confirmed to Forbes Wednesday it received the recommendation from the HHS and noted it has final authority on the reschedule. The agency initiated its review yesterday, though it’s unclear how long the process will take. A successful reschedule of marijuana would expand the means of manufacturing and researching marijuana, according to California-based law firm McGlinchey Stafford.
The reschedule recommendation from the HHS is part of President Joe Biden’s marijuana reform plan announced last year, which called for the HHS and the attorney general to begin the process of evaluating how marijuana is scheduled under federal law. Marijuana is a Schedule 1 drug with no currently accepted medical use and a high abuse potential, according to the Controlled Substance Act’s schedule guide.
Despite this harsh treatment under federal law, scores of growers and retailers sell marijuana to recreational and medical customers under the auspices of state law, and the federal government has sent signals for years that it doesn’t plan on cracking down on these companies. Biden accompanied his reform plan with a proclamation pardoning federal convictions of those with marijuana possession offenses.