Trump confirms potential drug reclassification, but stocks slide
Bill Schmitt Jr. (C) joins marijuana reform protesters outside the White House to call on U.S. President Joe Biden to “take action on marijuana amnesty before the November general election” on October 24, 2022 in Washington, DC.
Win Mcnamee | Getty Images
Marijuana stocks failed to rally for a second day Monday, even after President Donald Trump confirmed he was considering an executive order loosening marijuana regulations.
Strengthen Seymour Cannabis ETF (CNBS) It rose in afternoon trading after Trump said he was considering reclassifying the drug. Still, the fund lost nearly 7% as investors took profits after Friday’s more than 50% rally.
Asked Monday if he was looking at an executive order to reschedule the grassroots, Trump said, “We’re considering it.”
“A lot of people want to see this reclassify because it leads to a tremendous amount of research that can’t be done unless you reclassify,” he said. “That’s why we’re looking at this very strongly.”
Trump’s comment follows reports Friday that the president is considering instructing federal agencies to reclassify marijuana from a Schedule I substance to a less regulated Schedule III drug. A person familiar with the matter told CNBC that an order could come from the White House as soon as Monday.
The reports sparked a rally in the sector on Friday that propelled the Amplify Seymour fund to its best day on record. The ETF has moved into positive territory for the year and is on track to break its four-year losing streak.
Those in the industry have long expected this change in classification to move marijuana from a drug group that includes heroin to a group alongside steroids and Tylenol with codeine. Trump announced in August that he had made a change in the classification of marijuana.
But they said there was greater optimism that there was enough momentum to make such a move at the finish line, which could help banks and large investors warm up to the sector.
“I’m more optimistic than ever” Tilray CEO Irwin Simon told CNBC on Friday.
Weed producers Tilray and Canopy Growth They fell 10% and 4.6% respectively in Monday’s session. Retailer SNDL fell more than 13 percent.
— CNBC’s Kevin Breuninger and Brandon Gomez contributed reporting.
