As a result of increased hopes of federal legalisation following a U.S. health agency's suggestion to reschedule marijuana as a lower-risk narcotic, shares of marijuana companies increased by as much as 37% in morning trade on Thursday.
In some form, marijuana usage is legal in close to 40 U.S. states, but federal efforts to legalise it have stalled, scaring away some investors and forcing the industry to rely on unconventional funding sources.
"A move to Schedule III would eliminate the onerous tax treatment of U.S. MSOs, and represent a major legitimizing event for the industry that could draw participation from institutions and strategic investors who have hitherto largely been sidelined by its Schedule I status," said Eight Capital analyst Ty Collin.
Cronos Group, OrganiGram Holdings, Aurora Cannabis, and Canopy Growth shares all saw gains of between 6% and 25%.
Between 15% and 37% were gained by Verano Holdings, Green Thumb Industries, Cresco Labs, Curaleaf Holdings, and Goodness Growth.
AdvisorShares Pure US Cannabis ETF, a pot stock tracker, increased by about 17%. Following the announcement, it closed Wednesday 21.2% higher, marking its biggest day since October 6, 2022.
The Drug Enforcement Agency (DEA), which has the last say on rescheduling and will now start its own study, has received the recommendation from the U.S. Department of Health and Human Services (HHS).
Despite the House of Representatives passing the SAFE Banking Act seven times, which is an important piece of legislation that would make it simpler for the cannabis business to obtain banking services, it has not been approved by the Senate.
"Certainly moving cannabis off of Schedule 1 is the right decision and long overdue. Though a full descheduling would be preferred and likely most appropriate for cannabis," said Patrick Rea, managing director of venture capital firm Poseidon Garden Ventures.
According to the company's website, it had stakes in the cannabis data platform Flowhub as well as the cannabis merchant and producer Green Thumb.
(Source:www.usnews.com)
In some form, marijuana usage is legal in close to 40 U.S. states, but federal efforts to legalise it have stalled, scaring away some investors and forcing the industry to rely on unconventional funding sources.
"A move to Schedule III would eliminate the onerous tax treatment of U.S. MSOs, and represent a major legitimizing event for the industry that could draw participation from institutions and strategic investors who have hitherto largely been sidelined by its Schedule I status," said Eight Capital analyst Ty Collin.
Cronos Group, OrganiGram Holdings, Aurora Cannabis, and Canopy Growth shares all saw gains of between 6% and 25%.
Between 15% and 37% were gained by Verano Holdings, Green Thumb Industries, Cresco Labs, Curaleaf Holdings, and Goodness Growth.
AdvisorShares Pure US Cannabis ETF, a pot stock tracker, increased by about 17%. Following the announcement, it closed Wednesday 21.2% higher, marking its biggest day since October 6, 2022.
The Drug Enforcement Agency (DEA), which has the last say on rescheduling and will now start its own study, has received the recommendation from the U.S. Department of Health and Human Services (HHS).
Despite the House of Representatives passing the SAFE Banking Act seven times, which is an important piece of legislation that would make it simpler for the cannabis business to obtain banking services, it has not been approved by the Senate.
"Certainly moving cannabis off of Schedule 1 is the right decision and long overdue. Though a full descheduling would be preferred and likely most appropriate for cannabis," said Patrick Rea, managing director of venture capital firm Poseidon Garden Ventures.
According to the company's website, it had stakes in the cannabis data platform Flowhub as well as the cannabis merchant and producer Green Thumb.
(Source:www.usnews.com)
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