Shares of cannabis firms rose on Thursday after U.S. President Donald Trump signed an executive order loosening federal regulations, in the biggest shift in marijuana regulation since 1970.
The decision to reclassify cannabis as a less dangerous drug does not legalize cannabis, but eases the operating environment for companies by improving access to capital, reducing tax burden and accelerating research and development.
U.S.-listed shares of Tilray gained over six per cent, Aurora Cannabis rose nearly nine per cent, SNDL rose six per cent, and Canopy Growth gained nearly 12 per cent in afternoon trading.
Trump’s order directs his attorney general to quickly move ahead with reclassifying marijuana, according to senior administration officials, a process that could lead to the psychoactive plant being listed alongside common painkillers, ketamine and testosterone as a less dangerous drug.
“Without rescheduling, I don’t think a lot of shareholders would be buying my stock and a lot of other cannabis stocks,” said Irwin Simon, CEO of Tilray Brands, ahead of the order.
A reclassification would move marijuana from Schedule I, which includes substances like heroin, ecstasy and peyote that have no accepted medical use, to Schedule III, which covers substances with a moderate-to-low risk of physical or psychological dependence.
Trump is considering a Medicare pilot program that would provide some seniors access to CBD, according to reports.
Rescheduling and Medicare coverage would likely attract investments from financial institutions and other investors.
(Reporting by Puyaan Singh, Christy Santosh, additional reporting by Sriparna Roy in Bengaluru; Editing by Sriraj Kalluvila, Saumyadeb Chakrabarty and Alan Barona)
