Cannabis stocks continued to move higher following the Labor Day long weekend after the U.S. Department of Health and Human Services (HHS) last week recommended reclassifying marijuana as a lower-risk drug.
The Drug Enforcement Administration (DEA) has now initiated a review of marijuana following HHS’s recommendation that it be rescheduled from a Scheule I to Scheule III drug and, following the review, will make the final decision regarding a potential rescheduling.
Investors welcomed the recommendation as cannabis stocks have largely struggled for the last few years, weighed down by a lack of a federal law governing cannabis in the United States, oversupply and competition in legal markets, and limited access to capital and financial services, among other challenges.
As such, cannabis stocks spiked on Wednesday following HHS’s recommendation and ended the week higher with gains continuing on Tuesday after the three-day weekend.
CBD-focused 1606 Corp. (OTC:CBDW) stock surged 35.7% while the multi-state operator of branded cannabis assets Jushi Holdings Inc (CSE:JUSH, OTCQX:JUSHF) had gained 22.2% shortly after noon on Tuesday.
Multi-state cannabis retailer Planet 13 Holdings Inc (CSE:PLTH, OTCQX:PLNHF) had gained 6.5% and cannabis-infused consumer packaged goods company Delivra Health Brands Inc. (TSX-V:DHB) had added 2%.
Also extending their gains on Tuesday were major players in the cannabis sector, including Canopy Growth Corporation (TSX:WEED, NYSE:CGC), Tilray Inc (NASDAQ:TLRY), Trulieve Cannabis Corp. (CSE:TRUL), Cronos Group Inc (NASDAQ:CRON, TSX:CRON), Curaleaf Hldgs Inc. (CSE:CURA, OTCQX:CURLF), and Green Thumb Industries Inc. (CSE:GTII, OTCQX:GTBIF) which had added 24.9%, 5.5%, 11.9%, 7.1%, 14.3% and 14.5% respectively.
Cresco Labs Inc. (CSE:CL, OTCQX:CRLBF) was up 18.4% while OrganiGram Holdings (TSX-V:OGI, NASDAQ:OGI) had added 5.8% and Aurora Cannabis Inc (TSX:ACB, NASDAQ:ACB) was up 7.2%.
Contact the author at emily.jarvie@proactiveinvestors.com
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