Cannabis Stocks Slide as DEA Sets Post-Election Marijuana Hearing in December

Cannabis stocks slumped Tuesday after the Drug Enforcement Administration (DEA) announced a hearing that could reclassify marijuana as a less harmful, Schedule III drug won’t come until Dec. 2—after the 2024 presidential election.

Canopy Growth Corp. (CGC) stock closed off about 9.5% Tuesday after the news, with Tilray Brands (TLRY) dropping nearly 6% and Aurora Cannabis (ACB) sliding almost 5%. 

AdvisorShare Pure U.S. Cannabis ETF (MSOS), the largest exchange-traded fund (ETF) for cannabis stocks, tumbled about 13%.

For decades, marijuana has been classified under the Controlled Substances Act as a Schedule I drug, making it illegal under federal law and placing it alongside heroin, LSD, and other substances considered to have high potential for abuse.

By comparison, the DEA considers Schedule III drugs to have a moderate to low potential for dependence. Examples include anabolic steroids, Tylenol with codeine, and ketamine. 

Election Impact

Scheduling the hearing after the election matters because the candidates may have different approaches to marijuana legalization.

Vice President Kamala Harris called on the Department of Justice to speed up the rescheduling of marijuana in March after the Department of Health and Human Services recommended the agency do so last year.

Former President Donald Trump has been harder to nail down on cannabis policy, but, as president in 2018, he said he “probably” would support a bipartisan bill that would have effectively ended the federal ban on marijuana.