Trump plans to sign an executive order to reclassify marijuana, and US and Canadian cannabis stocks rebound

The Zhitong Finance App learned that after weakening for a while earlier this week, US cannabis-related stocks rebounded on Wednesday. The report said that US President Trump will sign an executive order on the reclassification of marijuana as early as Wednesday, boosting market sentiment.

According to two senior US government officials familiar with the inside story, the executive order is expected to indicate that the long delay in reclassifying marijuana has not actually served Americans who may benefit from its medical use, including patients with diseases such as chronic pain relief.

After the news broke, many cannabis-related ETFs rose markedly. Among them, AdvisorShares Pure US Cannabis ETF (MSOS.US), which represents US multi-state operators, rose more than 2.4% in the leading sector; in addition, AdvisorShares Pure Cannabis ETF (YOLO.US) and Amplify Seymour Cannabis ETF (CNBS.US) rose simultaneously.

According to related reports, the White House plans to push for the reclassification of marijuana from the current Schedule I controlled substance (Schedule I) to a Class III controlled substance (Schedule III) in the Controlled Substances Act. Currently, level 1 controlled substances also include LSD and heroin, while level 3 controlled substances cover drugs with clear medical uses, such as ketamine. Analysts pointed out that this move does not mean marijuana will be legalized across the US, but it is expected to bring substantial benefits to the industry.

The market generally believes that if the re-classification is implemented, cannabis companies will benefit from tax relief and face fewer restrictions on the circulation of products across states, thereby improving profitability and the business environment.

Previously, marijuana concept stocks such as MSOS fell under pressure due to Trump's failure to immediately sign the relevant executive order as expected by the market on Monday. Afterwards, during the White House event, Trump confirmed that he would push forward with the marijuana reclassification plan, driving a rapid recovery in sector sentiment.

In terms of individual stocks, Ascend Wellness (AAWH.US), Curaleaf Holdings (CURLF.US), Cresco Labs (CRLBF.US), Green Thumb Industries (GTBIF.US), Trulieve Cannabis (TCNNF.US), Ayr Wellness (AYRWF.US), and Verano Holdings are among the US multi-state cannabis operators (VRNO.US) and Jushi Holdings (JUSHF.US) have both received attention. Among Canadian licensed producers, Canopy Growth (CGC.US), Tilray (TLRY.US), Cronos Group (CRON.US), Aurora Cannabis (ACB.US), SNDL (SNDL.US), and OrganiGram Holdings (OGI.US) also strengthened along with the overall sector.