Cannabis Company Stocks Surge Over 50% Following Removal from Drug List

Following the news from Germany, along with the anticipated decision by the DEA, shares of Canopy Growth have surged by 230% since March 15, Aurora Cannabis by 70%, and Tilray by 55%. Last week, the Drug Enforcement Administration (DEA), which monitors the entry and exit of narcotics in the United States, announced that it will move the cannabis plant from Schedule 1 to Schedule 3 on its current list, classifying it as “less dangerous.”

This means that the medical uses of cannabis will be recognized, indicating that this substance presents less risk of abuse compared to some of the country’s most dangerous drugs. The Department of Justice (DOJ), which audits DEA decisions, wants cannabis to be classified as a Schedule 3 drug (moderate to low potential for physical and psychological dependence). Cannabis, currently in Schedule 1, is grouped with drugs like LSD and heroin, which have a high potential for abuse and no widely accepted medical use in the United States.

A Significant Step for the Cannabis Industry

This development is seen as a ‘midway point’ for the commercial cannabis industry, as less than two months ago, it was leaked that the German government had approved a bill that would relax marijuana laws, making it possible for individuals to possess cannabis for personal use.

According to XTB, any news related to marijuana legislation is usually enough to boost the stock prices of cannabis companies. Additionally, Germany is one of the largest and most promising marijuana markets in the world.

Stock Surge for Cannabis Companies

Following the news from Germany and the DEA’s decision, shares of Canopy Growth have surged by 230% since March 15, Aurora Cannabis by 70%, and Tilray by 55%. Shares of Cronos Group have also risen between 14.9% and 67.7% on the New York Stock Exchange.

ETFs Also on the Rise

Among the significant gains are the Roundhill Cannabis ETF, the AdvisorShares Pure Cannabis ETF, and the Amplify U.S. Alternative Harvest ETF, which have accumulated gains of 29.6% to 36.6% so far this year, making them some of the best-performing ETFs of 2024.

However, these gains have not yet translated into asset growth for many funds, suggesting that ETF investors are cautious about making new large-scale investments in the sector.

Of the nine cannabis-focused ETFs in the U.S. market, only two – the AdvisorShares MSOS 2x Daily ETF and the AdvisorShares Pure US Cannabis ETF – have recorded inflows since the DOJ’s announcement, according to data from LSEG Group.

“The increases we’ve seen have been driven by cannabis-focused investors who have been waiting for this news but who already have money in a handful of their favorite stocks,” said Steve Sosnick, market strategist at Interactive Brokers.

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Cannabis Company Stocks Surge Over 50% Following Removal from Drug List

Following the news from Germany, along with the anticipated decision by the DEA, shares of Canopy Growth have surged by 230% since March 15, Aurora Cannabis by 70%, and Tilray by 55%. Last week, the Drug Enforcement Administration (DEA), which monitors the entry and exit of narcotics in the United States, announced that it will move the cannabis plant from Schedule 1 to Schedule 3 on its current list, classifying it as “less dangerous.”

This means that the medical uses of cannabis will be recognized, indicating that this substance presents less risk of abuse compared to some of the country’s most dangerous drugs. The Department of Justice (DOJ), which audits DEA decisions, wants cannabis to be classified as a Schedule 3 drug (moderate to low potential for physical and psychological dependence). Cannabis, currently in Schedule 1, is grouped with drugs like LSD and heroin, which have a high potential for abuse and no widely accepted medical use in the United States.

A Significant Step for the Cannabis Industry

This development is seen as a ‘midway point’ for the commercial cannabis industry, as less than two months ago, it was leaked that the German government had approved a bill that would relax marijuana laws, making it possible for individuals to possess cannabis for personal use.

According to XTB, any news related to marijuana legislation is usually enough to boost the stock prices of cannabis companies. Additionally, Germany is one of the largest and most promising marijuana markets in the world.

Stock Surge for Cannabis Companies

Following the news from Germany and the DEA’s decision, shares of Canopy Growth have surged by 230% since March 15, Aurora Cannabis by 70%, and Tilray by 55%. Shares of Cronos Group have also risen between 14.9% and 67.7% on the New York Stock Exchange.

ETFs Also on the Rise

Among the significant gains are the Roundhill Cannabis ETF, the AdvisorShares Pure Cannabis ETF, and the Amplify U.S. Alternative Harvest ETF, which have accumulated gains of 29.6% to 36.6% so far this year, making them some of the best-performing ETFs of 2024.

However, these gains have not yet translated into asset growth for many funds, suggesting that ETF investors are cautious about making new large-scale investments in the sector.

Of the nine cannabis-focused ETFs in the U.S. market, only two – the AdvisorShares MSOS 2x Daily ETF and the AdvisorShares Pure US Cannabis ETF – have recorded inflows since the DOJ’s announcement, according to data from LSEG Group.

“The increases we’ve seen have been driven by cannabis-focused investors who have been waiting for this news but who already have money in a handful of their favorite stocks,” said Steve Sosnick, market strategist at Interactive Brokers.