Cannabis stocks experienced a downturn on Tuesday following the announcement of a December 2 hearing by the Drug Enforcement Administration (DEA) to discuss reclassifying marijuana as a Schedule III drug. This classification would mark a significant shift from its current status as a Schedule I substance, which includes drugs like heroin and LSD, deemed to have a high potential for abuse.
Following the news, Canopy Growth Corp. (CGC) saw its stock drop approximately 9.5%, Tilray Brands (TLRY) fell nearly 6%, and Aurora Cannabis (ACB) slid almost 5%. The AdvisorShare Pure U.S. Cannabis ETF (MSOS), the largest ETF tracking cannabis stocks, tumbled around 13%.
The hearing’s timing, set for after the 2024 presidential election, means any decision on marijuana’s reclassification will not be made until December. This delay is significant given the differing stances of presidential candidates on marijuana policy. Vice President Kamala Harris has advocated for speeding up the rescheduling process, while former President Donald Trump has shown mixed signals regarding cannabis legalization.
Currently, marijuana is classified as a Schedule I drug under the Controlled Substances Act, making it illegal federally and placing it alongside substances with high abuse potential. Schedule III drugs, on the other hand, are considered to have a moderate to low potential for dependence, including substances like Tylenol with codeine and anabolic steroids.
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