Reports indicate that Trump is expected to sign an executive order as early as next Monday, reclassifying marijuana from Schedule I to the less restrictive Schedule III category, with implementation anticipated by early next year. Following the news, cannabis stocks surged significantly during Friday's trading session. Tilray Brands skyrocketed by 44%, while Canopy Growth soared by 53%.
The White House is preparing to significantly relax restrictions on the 'drug' marijuana.
On December 12, according to media reports citing informed sources, U.S. President Trump is expected to sign an executive order as early as next Monday to reclassify marijuana as a less strictly controlled substance.
This policy will allow cannabis companies to apply different tax rules and encourage investment inflows into the industry. Following the news, cannabis stocks surged significantly during Friday's trading session.
Cannabis producers$Tilray Brands (TLRY.US)$Surged 44%,$Canopy Growth (CGC.US)$Soared 53%. The Amplify Seymour Cannabis ETF skyrocketed over 54%, marking the fund's best single-day performance ever.
A significant adjustment to the regulatory framework will occur.
As first reported by the media on Thursday, Trump is expected to direct federal agencies through an executive order to reclassify marijuana from Schedule I to the less restrictive Schedule III category.
The report stated that this potential reclassification would move marijuana from the most strictly controlled category for narcotics to a level comparable to substances such as steroids and Tylenol with codeine, which are considered less dangerous, with implementation expected early next year.
Trump had already proposed changing the classification of marijuana as early as August last year. In a note to clients on Friday, Ed Groshans of mid-sized investment bank Compass Point wrote:
In our assessment, it is not a matter of if Trump will reschedule marijuana, but when.
Groshans stated that the reported changes would be "positive" for the cannabis industry, allowing banks to provide services to the sector. He predicted that if Trump orders the rescheduling of marijuana, the U.S. Drug Enforcement Administration will finalize the proposed rule for reclassification before next summer.
Bill Kirk, a senior research analyst at Roth, stated that he is also watching to see whether the Supreme Court will decide next week to hear a case concerning state regulation versus federal prohibition of cannabis. A ruling favorable to the industry could accelerate the regulatory timeline.
Cannabis producers$Tilray Brands (TLRY.US)$Chief Executive Irwin Simon told the media:
I am more optimistic than ever before.
Since a brief surge during the pandemic, cannabis stocks have been struggling,$Tilray Brands (TLRY.US)$The stock is currently trading at just above $10, compared to its peak of over $2,140 in September 2018 (adjusted for stock splits).
Editor/melody