Canadian cannabis stocks spike as U.S. reportedly set to reclassify marijuana

Staff work in a marijuana grow room at Canopy Growth's Tweed facility in Smiths Falls, Ont., on Thursday, Aug. 23, 2018. Canadian cannabis stocks are soaring after the U.S. Drug Enforcement Administration said it will reclassify marijuana as a less dangerous drug. THE CANADIAN PRESS/Sean Kilpatrick

TORONTO — Canadian cannabis stocks soared Tuesday afternoon after The Associated Press reported the U.S. Drug Enforcement Agency will move to reclassify marijuana as a less dangerous drug.

Canopy Growth Corp. surged 49 per cent after the announcement, while Aurora Cannabis Inc. and Tilray Brands Inc. soared 32 and 39 per cent, respectively.

The Associated Press, citing five sources familiar with the matter, reported the DEA’s proposal would recognize the medical uses of cannabis and acknowledge it has less potential for abuse than other, more dangerous drugs.

However, it would not legalize marijuana for recreational use.

Currently, marijuana is listed as a Schedule I drug in the U.S., alongside heroin and LSD, but would be reclassified as a Schedule III drug, alongside ketamine and some anabolic steroids.

The reclassification of the drug in the U.S. could lessen risks for cannabis companies that operate south of the border and potentially improve investor appetite for cannabis stocks.

This report by The Canadian Press was first published April 30, 2024.

Companies in this story: (TSX:TLRY, TSX:ACB, TSX:WEED)

The Canadian Press