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Key Takeaways
- Shares of cannabis companies jumped in intraday trading on Tuesday after the Associated Press reported federal drug enforcement authorities were proposing to reclassify marijuana as a less dangerous drug.
- Marijuana is currently classified as a Schedule I drug, putting it on a level with heroin and LSD as one of the nation’s most dangerous substances.
- The proposal would not change marijuana’s legal status on the federal level.
Cannabis stocks soared on Tuesday after the Associated Press reported the U.S. Drug Enforcement Administration (DEA) planned to reclassify marijuana as a less dangerous class of drug.
The DEA’s proposal, according to sources who spoke to the AP on the condition of anonymity, would acknowledge marijuana’s medical applications and recognize the substance has less potential to be abused than more dangerous drugs.
Marijuana is currently classified as a Schedule I drug alongside heroin and LSD. The DEA proposal would make marijuana a Schedule III drug, characterized by “moderate to low potential for physical and psychological dependence,” alongside ketamine and anabolic steroids.
While the proposal would not legalize marijuana nationally, it is seen as a major policy change that could shift public opinion. Marijuana has already been legalized for medical use in 38 states and recreational use in 24.
Cannabis stocks soared following the news. With about an hour left in Tuesday’s trading session, the AdvisorShares Pure US Cannabis ETF (MSOS) was up 22%, while shares of Canadian grower Canopy Growth Corp. (CGC) and New York-based Curaleaf Holdings (CURLF) were up 54% and 18%, respectively.