Shares of cannabis-related companies soar. The US is preparing an important reform - Axios
Shares of cannabis-related companies rose sharply after a report of substance reclassification / Photo: Shutterstock
Shares of cannabis-related companies rose sharply after Axios reported that the U.S. Department of Justice may soon move marijuana into a less strict control category. An unnamed administration official told the publication that this could happen as soon as Wednesday, April 22. MarketWatch called the pending decision the most significant federal reform in this area in decades.
Shares of Canadian Canopy Growth and Tilray Brands jumped on the Nasdaq exchange by 21% and 15%, respectively. At the same time, the trading volume of Tilray amounted to 22.5 million shares at an average level over the past 30 days of 2.8 million, calculated MarketWatch. On OTC platforms quotations Curaleaf soared by 26%, Trulieve Cannabis - almost 17%, Green Thumb Industries added 10%.
The largest exchange traded fund tracking the industry, the AdvisorShares Pure US Cannabis ETF is up 22%.
It's not about legalization, but lowering barriers to research into potential uses, Axios writes. The initiative would move cannabis from a Schedule I category, which includes substances with a high risk of addiction and no recognized medical use, to Schedule III, which includes drugs like Tylenol with codeine, Barron's explains.
The reclassification could make it easier for marijuana-related businesses to access funding and research, CNBC writes. It would also reduce the tax burden: companies working with Schedule I substances don't get some of the benefits. That said, Tilray, Canopy and other Canadian licensed producers have lost billions of dollars over the past decade - largely due to over-expansion of their businesses following the legalization of recreational cannabis in the country in 2018, MarketWatch recalls.
A White House official told Barron's that the administration is working to comply with Donald Trump's December executive order, which directed regulators to reclassify marijuana "as soon as practicable." The DOJ could not immediately respond to the publication's request for comment.
