Trump confirms possible drug reclassification, but stocks fall
Bill Schmitt Jr. (center) joins cannabis reform protesters outside the White House and calls on U.S. President Joe Biden to “take action on cannabis pardons before the November general election” on October 24, 2022 in Washington, DC.
Win Mcnamee | Getty Images
Cannabis stocks failed to rally for a second day on Monday, even after President Donald Trump confirmed he is considering easing marijuana regulations through an executive order.
The Amplify Seymour Cannabis ETF (CNBS) rose in afternoon trading after Trump said he was considering reclassifying the drug. Still, the fund lost nearly 7% as investors took profits after a rise of more than 50% on Friday.
When asked Monday whether he was considering an executive order to reschedule weed, Trump replied, “We’re considering it.”
“A lot of people want to see reclassification because it leads to enormous amounts of research that can’t be done without reclassification,” he said. “So we’re looking at it very closely.”
Trump’s comments come after it was reported Friday that the president was considering directing federal regulators to reclassify marijuana from a Schedule I substance to a less regulated Schedule III drug. A person familiar with the matter told CNBC that an order from the White House could come as soon as Monday.
The reports sparked an industry rally on Friday, giving the Amplify Seymour fund its best day ever. The ETF turned positive over the course of the year and was well on its way to ending a four-year losing streak.
Industry insiders have long anticipated this classification change, which would move cannabis from a drug group that includes heroin into a cohort alongside steroids and Tylenol with codeine. Trump brought up a change in the classification of marijuana in August.
But they said there was more optimism that there was enough momentum to get such a move – which could help boost banks and major investors in the sector – over the finish line.
“I am much more optimistic than ever before” Tilray CEO Irwin Simon told CNBC on Friday.
The weed producers Tilray and Canopy growth fell 10% and 4.6%, respectively, in Monday’s session. Retailer SNDL fell by more than 13%.
—CNBC’s Kevin Breuninger and Brandon Gomez contributed reporting.
