The U.S. Drug Enforcement Administration (DEA) plans to change the way it classifies marijuana, making it less of a risky drug. This is a big change in how the U.S. deals with drugs.
Right now, marijuana is in the same group as heroin and LSD, which is called Schedule I. The new plan is to put it on Schedule III, along with drugs like ketamine and some steroids.
This change shows that marijuana has some medical benefits and isn’t as harmful as other drugs. The DEA wants to do this after getting advice from the Department of Health and Human Services. It’s also because President Joe Biden asked them to review federal marijuana laws in October 2022.
Big Jump in Cannabis Stocks
When the news came out, stocks of companies involved with cannabis shot up by a lot. Tilray Brands Inc. went up by as much as 27%, and Canopy Growth Corp. increased by up to 26%.
The MJ PurePlay 100 Index, which follows the global cannabis industry, went up by 15%, which was the biggest increase it had seen in a single day since August 2023.
Also, the AdvisorShares Pure US Cannabis ETF went up by as much as 25%, and had to stop trading for a bit because the market was moving so much.
This reaction from the market shows how much investors have been waiting for the DEA to do something about how marijuana is classified. If it changes, it could help cannabis companies deal with taxes and rules better.
What it Means for Cannabis Businesses
If marijuana gets reclassified, it could mean way less taxes for cannabis businesses. Right now, they might have to pay up to 70% or more in taxes, according to people in the industry.
It could also make it easier to research marijuana because right now, it’s really hard to do studies on it when it’s classified as a Schedule I substance.
While it might not immediately change how the justice system handles marijuana cases, because there haven’t been many federal cases for simple possession lately, it’s still seen as a step toward fixing the problems President Biden talked about.
Things like making it hard to get a job, find a place to live, or get an education because of past marijuana charges.
