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Cannabis companies like Tilray Brands and Canopy Growth may soon face an even easier path after Pres. donald trumpThis step helps to reclassify the drug status.
Companies have been slow to respond to Trump’s executive order, although the sector has been gaining momentum over the past week in anticipation of the move. Trump’s executive order will accelerate this Drug Enforcement Administrationprocess that would move the drug’s current classification as a Schedule I drug along with heroin lsdInstead cannabis will be a Schedule III substance like ketamine and some anabolic steroids,
The move could create momentum for an industry that has been struggling under the constant threat of state regulations and strict enforcement of federal laws.
Tilray Brands fell 4.2% to $12.33 following the executive order. The stock is well below its $17 price when it went public in 2008. Still, it surged more than 50% in December in anticipation of Trump’s executive order.
Canopy Growth, which trades on the Toronto Stock Exchange, fell 12.5% but is up more than 40% in December.
Curaleaf Holdings, which also trades on the Toronto Stock Exchange, fell 32% on Thursday but is still up more than 30% for December.
Roundhill Investments’ electronically-traded fund for cannabis companies fell 26.8% on Thursday, but is up more than 40% for December.
Cannabis stocks have been declining for the past few years. While many states relaxed regulations for drug sales and consumption, federal laws continued to hinder the operation and expansion of many companies. Reclassification by the DEA does not necessarily make it legal for recreational use, but it does soften the regulations surrounding the drug.
The regulatory change could reduce the tax burden for marijuana businesses, while also making it easier to conduct marijuana research such as clinical studies. Financial institutions have kept their distance from marijuana businesses due to strict regulations and the change could mean greater access to banks, investments and loans for the industry.