Why are cannabis stocks trading significantly up on Thursday?

By:
on Aug 31, 2023
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  • U.S. HHS recommends rescheduling Marijuana as a Schedule III drug.
  • Edward Conklin and Patrick Rea reacted positively to the news.
  • Cannabis stocks Tilray Brands and Cronos Group are up over 10% today.

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Cannabis stocks are celebrating this morning after the U.S. Department of Health and Human Services recommended in a letter to the Drug Enforcement Administration that Marijuana be reclassified as a Schedule III drug.

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Marijuana is a Schedule I drug at writing

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The Controlled Substances Act currently labels Marijuana a Schedule I drug – a category of drugs with significant potential of abuse and no accepted medical use.

If Marijuana is reclassified as proposed, it will potentially unlock new realms of growth for the multi-billion-dollar cannabis market. According to Edward Conklin – the Executive Director of the U.S. Cannabis Council:

Cannabis should have never been scheduled alongside heroin and placed at the center of our nation’s destructive drug war. Thankfully that era is coming to a close.

DEA – the agency in charge of deciding if Marijuana should indeed be rescheduled will now review the psychoactive drug.

Tilray and Cronos stocks are up today

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Both Tilray Brands Inc and its Canadian peer Cronos Group Inc jumped more than 10% following this stock market news on Thursday.

Close to half of the American states have already legalised Marijuana for recreational purposes. Commenting on today’s development, Patrick Rea of Poseidon Garden Ventures said:

Moving cannabis off of Schedule I is the right decision and long overdue. We welcome smart decisions and progress towards full legalisation and regulation in the legal cannabis industry.

Note that federal restrictions, so far, have barred cannabis companies from accessing institutional capital or using traditional banking services.

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