Cannabis stocks extend gains after Biden White House shows support of marijuana reforms

By Steve Gelsi

Canopy Growth is up 49% in the past week, while Verano is up 27%

Cannabis stocks held on to big gains from the past week on Thursday on the heels of positive comments from the Biden administration on reclassifying cannabis from a Schedule I controlled substance under federal law.

President Joe Biden ignited buying in the sector on March 8 after he mentioned cannabis in his State of the Union speech, referencing an effort to change the current federal classification of marijuana. It is currently a Schedule I drug, like heroin and LSD - a more restrictive classification than that of fentanyl, which is a Schedule II drug.

Also read: Cannabis stocks rise after President Biden mentions plant in State of the Union speech

This was followed up by Vice President Kamala Harris saying in a meeting at the White House Friday that Schedule I classification for marijuana is "absurd" and that the plant should be rescheduled "as soon as possible."

The broad market has been in rally mode as well, creating more tailwinds for cannabis stocks.

The AdvisorShares Pure U.S. Cannabis exchange-traded fund MSOS rose 1.8% on Thursday, and was up 18.5% in the past week.

The Amplify Alternative Harvest ETF MJ rose by 0.8% and is up by 15.1% for the week.

Curaleaf Holdings Inc. (CURLF) rose 1.4% on Thursday to bring its gain for the week to 23.4%.

Trulieve Cannabis Corp. (TCNNF) rose by 4.5% to bring its total for the week to 19.8%.

Cresco Labs Inc. (CRLBF) fell 0.5% on Thursday but held a gain of 15.1% in the past week.

Verano Holdings Corp. (VRNOF) rose by 6.7% on Thursday and is up by 28% in the past week.

Green Thumb Industries Inc. (GTBIF) rose by 1.1% on Thursday and is ahead by 15% in the past week.

Ayr Wellness Inc. (AYRWF) rose 1.5% and has risen by 14.5% this week.

Canopy Growth Corp.'s stock (CGC) fell 3.1% on Thursday but held on to a gain of 48.6% in the past week. While its business is currently in Canada, the company is planning to close acquisitions of three U.S. cannabis businesses under a plan to create a Canopy USA unit.

Also read: Canadian cannabis giant Canopy Growth seeks shareholder approval to speed up entry into U.S. market

Canada's Aurora Cannabis Inc. (ACB) dropped 1.8% on Thursday, but the stock is still up by 26.9% in the past week.

Tilray Brands Inc. (TLRY), another Canadian producer, dropped by 2.3% on Thursday but has gained 16% in the past week. The company, which sells beer and other alcoholic beverages in the U.S., has said it's looking at the U.S. market for cannabis products in the future.

The U.S. Department of Health and Human Services last summer recommended cannabis for Schedule III status, which would allow for medical use of pot under federal regulations. The Drug Enforcement Administration is studying the recommendation but has not issued any timeline for its decision. Speculation has risen that the DEA could rule in the coming weeks.

Also read: HHS recommends rescheduling cannabis, and stocks in the sector rally

Cannabis companies have said they expect the change to Schedule III to eliminate the need to follow a tax law called 280E that prevents them from taking standard business tax deductions.

Curaleaf has said that the elimination of 280E restrictions would save it $150 million annually.

Also read: Cresco Labs' stock rallies as cannabis company swings to a profit

-Steve Gelsi

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

03-21-24 1456ET

Copyright (c) 2024 Dow Jones & Company, Inc.