The Department of Justice’s decision to reclassify marijuana as a Schedule III drug sent shockwaves through the stock market, with shares of leading cannabis companies experiencing significant gains. The reclassification, if approved by the Drug Enforcement Agency, would open up the availability of medical marijuana at the federal level, allowing for further research into its benefits while not decriminalizing the drug. The move marks a significant shift in federal policy towards marijuana, which has been classified as a Schedule I drug alongside heroin, ecstasy, and LSD for over 50 years.
The announcement caused shares of Canopy Growth Corp., the largest marijuana company by market cap, to surge by over 11% to close at $11 per share, reaching a one-month high. Other leading cannabis companies such as Aurora Cannabis, Green Thumb Industries, Trulieve Cannabis Corp, Tilray Brands, and Cronos Group also experienced significant stock gains on Thursday. Canadian cannabis producer Aurora Cannabis saw its stock spike by nearly 7%, while Green Thumb Industries and Trulieve Cannabis Corp both witnessed increases in their share prices.
The DEA has expressed its support for reclassifying marijuana as a Schedule III drug, placing it in the same category as common medications like Tylenol, codeine, and ketamine. President Joe Biden has been a vocal advocate for this policy change, pushing for the Department of Health and Human Services to review the reclassification process. A Pew Research Center poll conducted in March found that roughly three in five U.S. adults support the legalization of marijuana for medical and recreational use, highlighting the shifting attitudes towards the drug. However, critics warn of potential side-effects and increased access to marijuana, which could serve as a gateway to more harmful substances.
The reclassification of marijuana could have far-reaching implications for the cannabis industry, as it would pave the way for increased research into the medical benefits of the drug and potentially open up new opportunities for companies in the sector. The move comes as part of President Biden’s broader policy agenda ahead of the 2024 election and reflects the evolving views on marijuana legalization in the United States. While the reclassification is not expected to lead to immediate decriminalization of marijuana at the federal level, it represents a significant step towards expanding access to medical marijuana and legitimizing the cannabis industry.
Investors in the cannabis sector are closely monitoring the developments surrounding the reclassification of marijuana, with many anticipating further gains in the stock prices of leading companies. The soaring stock prices of companies like Canopy Growth Corp., Aurora Cannabis, and Green Thumb Industries reflect the optimism surrounding the potential expansion of the medical marijuana market. As the Biden administration continues to push for policy changes related to marijuana, the cannabis industry is likely to see increased interest from investors and consumers alike, setting the stage for further growth and innovation in the sector.
