FTSE 100-listed tobacco giants British American Tobacco PLC (LSE:BATS) and Imperial Brands PLC (LSE:IMB) slumped as North American cannabis stocks surged on reports that President Trump is considering easing restrictions on the sale of marijuana.
Trump may sign an executive order to reschedule marijuana at the federal level, potentially moving it from highly restricted Schedule I, which also includes drugs like heroin, LSD and ecstasy, to Schedule III, where drugs are recognised to have medical use and a moderate to low potential for abuse.
The reports, including from the Washington Post and Axios, suggest Trump has discussed the proposal with marijuana industry executives, health secretary Robert F Kennedy Jr, and Medicare & Medicaid chief Mehmet Oz.
The discussions reportedly included a Wednesday call with House speaker Mike Johnson, who expressed scepticism and cited studies and data opposing rescheduling, though industry executives reportedly countered his points during the call.
President Trump is likely to loosen federal restrictions on marijuana use early next year, Axios reported.
Cannabis law and policy experts said rescheduling would release cannabis businesses that are legal in certain states from some taxes.
Individual firms that spiked included Tilray Brands Inc (NASDAQ:TLRY), Canopy Growth Corporation (TSX:WEED, NYSE:CGC); Curaleaf Hldgs Inc. (CSE:CURA, OTCQX:CURLF) and Aurora Cannabis Inc (TSX:ACB, NASDAQ:ACB).
In London and New York, cigarette and vape makers BAT and Imperial fell 3.5% and 2.4%, but US-headquartered Philip Morris International Inc (NYSE:PM) and Altria Group Inc (NYSE:MO) were down only 0.55% and 0.65% respectively.