Stocks Jump as Trump Publicly Endorses Cannabidiol
Cannabis ETFs made some of their biggest gains on record.
Shares of cannabis companies surged Monday, Sept. 29, after U.S. President Donald Trump publicly endorsed Cannabidiol for senior healthcare. The non-psychoactive therapeutic compound from cannabis has versatile uses in medical practice. Trump’s backing comes a month after he commented his administration is looking into rescheduling cannabis under the Controlled Substances Act.
CBD could “revolutionize senior healthcare” by helping reduce the advancement of disease and can be used as an alternative to prescription drugs, is what Donald Trump said in a post on Truth Social on Sunday, Sept. 28. The next day, shares of cannabis companies surged. In fact, they were up before the bell.
U.S.-listed shares of Canopy Growth and Cronos Group soared by at least 15% during the day. Shares from Tilray Brands reportedly grew by 42% and Aurora Cannabis added 25.4%. In addition, exchange-traded funds by AdvisorShares boosted by almost 22% and Roundhill gained 21.6%, making the biggest quarterly gains in their history, according to reports.
“We’re encouraged by the U.S. administration’s recognition of cannabis and its potential role in supporting health and wellness for seniors,” a spokesperson for Canadian firm Canopy Growth said in a statement.
Stock boosts for cannabis operators are no surprise after a public person, and especially the president of the U.S., decides to endorse cannabis. “I do think there is further room for these stocks to move higher if it’s confirmed that the reclassification is happening,” Daniela Hathorn, senior market analyst at Capital.com told Reuters.
Public Stunt Comes After Recent Comment by Trump on Reclassifying Marihuana
Rescheduling is not the same as legalization, but it would significantly seal the void between state and federal cannabis laws. Rescheduling was mentioned by Trump last month. He said that his administration was looking into it.
A change with the Controlled Substances Act would alter the entire landscape around regulating cannabis. A lot of federal obstacles for cannabis businesses would be removed with reclassifying, which could also result in more companies going public and joining stocks trade.
Regulations on the commercial use of hemp and CBD substantially softened after Trump enacted the Agriculture Improvement Act during his first presidential term.
Later on, President Joe Biden initiated a federal review process for ultimately erasing cannabis from the list of Schedule I substances under the Controlled Substances Act, and making it a Schedule III drug. Such adjustment would place cannabis in a group of much safer drugs than where it is currently standing.
Over the years, cannabis stocks have mirrored each step taken by one U.S administration after another in regards to cannabis control. There have been delays in taking decisions, with each delay contributing to a volatile market environment for both investors and businesses. Hopefully, that volatility will wither with the much-anticipated cannabis reforms.
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Stephen Andrews
