Medical Cannabis Stocks Volatile on Trump Reclassification Move

Cannabis stocks surged on Wednesday on the Trump administration signaling marijuana reclassification from Schedule I to Schedule III under the Controlled Substances Act, but reversed course Thursday morning as details revealed the move applies only to medical cannabis. Either way, for operators and investors in the space, the policy shift translates to tax relief, regulatory clarity, and a step toward broader federal reform.

The order, signed by Acting Attorney General Todd Blanche, is one of the most significant federal cannabis policy shifts in decades. It comes after months of anticipation around federal reform, with the cannabis sector shorted and trading near multi-year lows. However, the order doesn’t legalize marijuana at the federal level, nor creates banking access for cannabis operators, a factor that investors across the space see as critical for a sustained re-rating of the sector.

The biggest gain is the removal of Section 280E tax restrictions, allowing state-licensed medical marijuana businesses to deduct standard business expenses on their federal taxes. This could significantly boost profitability for U.S. operators that previously faced effective tax rates exceeding 60%.

With the policy that’s narrower than market coped and sentiment cooled, here’s how some of the companies and multi-state operators in the space traded this morning:

• Canopy Growth Corporation’s (TSX: WEED) (NASDAQ: CGC) shares traded 8.33% lower at $1.265 per share at the time of writing on Thursday.
• Tilray Brands, Inc.’s (NASDAQ: TLRY) (TSX: TLRY) shares traded 3.94% lower at $7.56 per share at the time of writing on Thursday.
• Curaleaf Holdings, Inc.’s (TSX: CURA) (OTCQX: CURLF) shares traded 13.58% lower at $3.31 per share as of Thursday.
• Cresco Labs Inc.’s (CSE: CL) (OTCQX: CRLBF) (FSE: 6CQ) shares traded 8.40% lower at $1.09 per share at the time of writing on Thursday.
• Green Thumb Industries Inc.’s (CSE: GTII) (OTCQX: GTBIF) shares traded 6.05% lower at $7.46 per share at the time of writing on Thursday.
• TerrAscend Corp.‘s (TSX: TSND) (OTCQX: TSNDF) shares traded 14.6% lower at $0.7131 per share at the time of writing on Thursday.
• Aurora Cannabis Inc.’s (NASDAQ: ACB) (TSX: ACB) shares traded 9.28% lower at $3.4474 per share at the time of writing on Thursday.
• Verano Holdings Corp.’s (Cboe CA: VRNO) (OTCQX: VRNO) shares traded 12.41% lower at $1.18 per share at the time of writing on Thursday.