Shares of cannabis companies jumped Tuesday afternoon after the U.S. Department of Justice (DoJ) moved to reclassify marijuana as a less dangerous drug.
Publicly traded shares of Cronos Group, Tilray Brands and Canopy Growth rose 10.9% to 52%. The AdvisorShares Pure US Cannabis ETF soared 21%.
Canadian-listed Green Thumb Industries and Trulieve Cannabis rose 25% and 31%, respectively.
The DoJ, which oversees the Drug Enforcement Administration, recommended that cannabis be classified as a Schedule 3 drug, with moderate to low potential for physical and psychological dependence, instead of Schedule 1, which is reserved for drugs with a high potential for abuse, two sources confirmed to Reuters.
The proposal, which if finalized could constitute the most significant change in federal cannabis policy in 40 years, is being sent to the White House Office of Management and Budget for review and to finalize the process rulemaking, the sources said.
The reclassification will not outright legalize marijuana for recreational use.
Shares of publicly traded marijuana companies in the United States had also soared in 2019 after Canada legalized recreational marijuana use, but the rally collapsed the following year as revenue figures disappointed. not having justified their high valuations. (Reporting by Tanay Dhumal in Bengaluru; Editing by Tasim Zahid)
