Shares of cannabis companies jumped on Friday after the Washington Post reported U.S. President Donald Trump is expected to push the government to dramatically loosen federal restrictions on marijuana.
U.S.-listed shares of Tilray Brands gained 35%, while SNDL, Canopy Growth and ETF AdvisorShares Pure US Cannabis were up between 20% and 31% in morning trading.
According to the report from Thursday, Trump plans to direct agencies to reclassify marijuana as a Schedule III drug, reducing oversight of the plant and its derivatives to the same level as some common prescription painkillers and other drugs.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| TLRY | TILRAY BRANDS INC. | 11.05 | +2.62 | +31.08% |
| SNDL | SNDL | 2.12 | +0.35 | +20.06% |
| WEED | LISTED FUND TRUST ROUNDHILL CANNABIS ETF NEW | 21.97 | +5.70 | +35.06% |
| MSOS | ADVISORSHARES TRUST PURE US CANNABIS ETF | 5.06 | +1.30 | +34.46% |
“We believe this would open the door for pharmaceutical companies to seek approval for more cannabis products, which could then be dispensed the same as other prescription drugs,” TD Cowen analyst Jaret Seiberg said in a note.
Trump’s administration has been looking to reclassify marijuana as a less dangerous drug, a shift that could ease criminal penalties and reshape the industry through potentially lower taxes and by making it easier to secure funding.
Funding remains one of the biggest challenges for cannabis producers, as federal restrictions keep most banks and institutional investors out of the sector, forcing pot producers to turn to costly loans or alternative lenders.
This move sets the stage for several catalysts, including “additional states legalizing cannabis, safer banking being passed, and the ultimate uplisting of plant-touching cannabis stocks to major US exchanges,” Alliance Global Partners analyst Aaron Grey said.
Under the Controlled Substances Act, marijuana is listed as a Schedule I substance, meaning it has a high potential for abuse and no currently accepted medical use.
Last year, the Biden administration asked the Department of Health and Human Services to review marijuana’s classification, and the agency recommended moving it to Schedule III classification.
The Drug Enforcement Administration has to review the recommendation and will decide on the reclassification.
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