Trump said that he is looking “very strongly” into reclassifying marijuana to aid research.
Cannabis stocks had a volatile session on Monday after President Trump said that he is “strongly” looking at an executive order directing federal agencies to reclassify marijuana as a less dangerous drug.
“We are considering that. Because a lot of people want to see it,” Trump said during a Mexican Border Defense medal presentation at the White House in Washington, DC. “The reclassification, because it leads to tremendous amounts of research that can’t be done unless you reclassify. So we are looking at that very strongly.”
Trump’s Reaffirmation Fails To Sustain Second Day Of Rally
Trump first hinted at reclassifying marijuana as a less dangerous drug in August. On Wednesday, Trump reportedly discussed the plan with House Speaker Mike Johnson, a Republican, in a call that also included marijuana industry executives, Health Secretary Robert F. Kennedy Jr., and CMS chief Mehmet Oz.
The president is expected to seek to ease access to the drug through an upcoming executive order that directs federal agencies to pursue reclassification, the Washington Post reported on Thursday, citing unnamed sources. The move might not legalize or decriminalize marijuana, but it would ease barriers to research, the report said.
On Friday, CNBC reported that an executive order could come as soon as Monday, causing a significant surge in cannabis stocks during the Friday trading session. However, the rally didn’t hold on Monday as investors cashed in on the Friday gains.
On Monday, Tilray stock closed down 10% and edged up 3% after hours, while Canopy Growth stock closed 5% lower. Shares of cannabis retailer SNDL, meanwhile, closed down 13% in the regular trading session and gained 2% after hours.
Current Classification
Marijuana remains a Schedule I drug under federal law — the same category as heroin and LSD — a classification reserved for substances deemed to have high abuse potential and no accepted medical use.
Trump is expected to classify marijuana as a Schedule III substance, indicating that it has a lesser potential for abuse and is allowed for use in specific medical treatments, but can also create risks of physical or psychological dependence.
Other Schedule III drugs include Tylenol with codeine, as well as specific steroid and hormone treatments.
How Did Stocktwits Users React?
On Stocktwits, retail sentiment around TLRY and CGC are trending in the ‘extremely bullish’ territory, coupled with ‘extremely high’ message volume.
While TLRY stock has dropped 18% this year, CGC has lost 39%.
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