Marijuana stocks have witnessed their most significant surge since March 2020. This surge is attributed to the anticipation of the Drug Enforcement Administration (DEA) potentially reducing the drug’s risk rating.
The MJ PurePlay 100 Index, which consists of 100 marijuana-related stocks, experienced its most substantial weekly increase in two and a half years, marking a 28% rise. Additionally, the Roundhill Cannabis ETF reported a 42% gain last week. The momentum was primarily driven by Assistant Secretary for Health Rachel Levine’s recommendation to the DEA to reclassify cannabis as a Schedule III drug under the Controlled Substances Act.
Anticipation of DEA’s Reclassification Boosts Marijuana Stocks
The current classification of marijuana in the US is as a Schedule I drug. This places it alongside substances such as heroin and LSD, indicating the highest risk and no accepted medical use. The recommendation to shift marijuana to Schedule III would align it with drugs like ketamine and anabolic steroids. These are considered to have a moderate to low potential for physical and psychological dependence.
The potential reclassification of marijuana is significant for the cannabis industry. If this change is implemented, it could provide cannabis companies with broader access to financial services. This would be a game-changer, potentially revolutionizing the industry’s financial landscape.
The potential DEA decision is not just about the financial implications. It also reflects a changing perception of cannabis in the US, both in terms of its medical utility and its risk profile. The reclassification could pave the way for more extensive research and acceptance of cannabis in medical and recreational spheres.
Now we need to wait and see if this potential reclassification be a precursor to the federal legalization of marijuana in the US? However, while it might come soon, we shouldn’t be holding our breath waiting, as it might take years for that to finally happen…
Source: Business Insider
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