U.S. President Donald Trump has sparked a surge in cannabis stocks with his endorsement of cannabidiol (CBD) for senior healthcare. This unexpected support, shared via a social media post on Truth Social, highlighted CBD’s potential to transform treatment for senior citizens.
Market Reaction to Trump’s Endorsement
Following Trump’s announcement, shares of several cannabis companies experienced notable increases. Key stock movements included:
- Canopy Growth: up 18.3%
- Tilray Brands: up 42%
- Cronos Group: up 15.5%
- Aurora Cannabis: up 25.4%
Additionally, exchange-traded funds (ETFs) also saw significant gains, with AdvisorShares’ MSOS increasing by 21.8% and Roundhill rising 21.6%. Both are on track for substantial quarterly gains, exceeding 70%.
Implications of Marijuana Reclassification
Trump indicated that his administration is considering reclassifying marijuana, which could ease some regulatory restrictions. Although marijuana is currently classified as a Schedule I substance under the Controlled Substances Act, a reclassification could shift it to a less restrictive category.
Daniela Hathorn, a senior market analyst at Capital.com, noted that this move doesn’t legalize marijuana but would significantly alleviate burdens on cannabis companies. “If reclassification occurs, there is room for these stocks to increase further,” she explained.
Historical Context and Future Prospects
The push for cannabis reclassification follows previous efforts during Trump’s administration to ease regulations via the Agriculture Improvement Act. Nonetheless, marijuana remains illegal at the federal level, despite its legal status in nearly 40 states.
Former President Joe Biden’s administration has also engaged in reviewing marijuana’s classification, with recommendations to move it to Schedule III, indicating a moderate to low potential for dependence.
Industry Responses
Industry leaders are optimistic about these developments. A spokesperson from Canopy Growth expressed encouragement regarding governmental recognition of cannabis and its potential health benefits for seniors. The company aims to contribute meaningfully as the situation unfolds.
If the marijuana tax burden under Section 280E is lifted, it could lead to increased participation from cannabis firms in U.S. stock exchanges and attract institutional investment.
As the market continues to react, the evolving landscape of cannabis legislation remains crucial for businesses and investors alike, highlighting the importance of regulatory frameworks in shaping the future of the industry.
