President Donald Trump of the United States announced on Monday that he is thinking about issuing an executive order to reschedule marijuana as a less harmful substance. This move may change the cannabis sector, reduce criminal penalties, and free up billions of dollars for research.
Reducing regulation to the level of typical prescription pharmaceuticals and possibly opening doors long blocked to banks and investors, the change would be one of the biggest federal adjustments to marijuana legislation in decades.
Trump told reporters in the Oval Office, "We are looking at that very strongly," in response to rumors that he is considering ordering federal law enforcement and health agencies to treat marijuana as a Schedule III narcotic.
"A lot of people want to see it the reclassification because it leads to tremendous amounts of research that can't be done unless you reclassify," he stated.
Like heroin, ecstasy, and peyote, marijuana is classified as a Schedule I substance under the U.S. Controlled Substances Act, indicating that it has no recognised medicinal value and a significant potential for abuse.
Local governments frequently have more lenient laws regarding marijuana, permitting its usage for recreational or medical purposes.
Stocks of cannabis-related businesses rose after early rumors that Trump could relax federal regulations on the psychotropic substance.
They stand to gain from producing more cannabis-related goods. The change may result in cheaper taxes and greater access to capital, which could change the industry. Tylenol combined with codeine, ketamine, and testosterone is one of the schedule III substances.
Due to federal prohibitions that prevent most banks and institutional investors from entering the cannabis industry, funding continues to be one of the largest obstacles for cannabis producers, requiring them to rely on expensive loans or alternative lenders.
Canopy Growth, Organigram Global, SNDL, Aurora Cannabis, Trulieve Cannabis, and Tilray Brands are among the U.S.-listed cannabis-related equities that closed down between 4% and 13%. Despite this, the stocks are still higher than they were when the reclassification was originally reported last week.
"We see this as a meaningful step forward for the global industry and one that must also come with smart regulation," an Aurora Cannabis representative told Reuters if the United States were to reschedule cannabis.
Several of the other businesses did not immediately reply to Reuters' request for comment, while Trulieve Cannabis declined to comment. On Friday, a White House spokesman stated that "no final decisions have been made on the rescheduling of marijuana."
The Department of Health and Human Services was asked to evaluate marijuana's classification last year by the Biden administration, and the agency suggested changing it to Schedule III. After reviewing the recommendation, the Drug Enforcement Administration will make the reclassification decision.
