This week brought promising news for the cannabis industry.
On Thursday, the Justice Department (DOJ) reclassified marijuana products licensed by states from Schedule 1 — the most restrictive federal category that includes heroin — to the less strictly controlled Schedule III. That group includes less-addictive drugs such as testosterone and codeine.
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That could have major implications for the ailing cannabis industry and is likely to revive investor interest in cannabis stocks and exchange-traded funds (ETFs).
Indeed, AdvisorShares Pure U.S. Cannabis ETF (NYSEMKT: MSOS), which focuses exclusively on the U.S. cannabis market, was up more than 6% in mid-morning trading on Friday. The ETF has 20 holdings and $729 million in net assets.
Amplify Alternative Harvest ETF (NYSEMKT: MJ) targets the broader global cannabis market — with a heavy weighting on Canadian cannabis producers — and holds 10 stocks, with about $116 million in net assets. The ETF climbed more than 2% in early trading on Friday morning.
And AdvisorShares Pure Cannabis ETF (NYSEMKT: YOLO) – which, like MSOS, is operated by AdvisorShares – adds some global stocks to the mix, though it still gives greater weight to U.S. companies. The ETF holds 18 stocks and has net assets of about $31 million. The ETF was down about 1.3% in early Friday trading.
The DOJ order was limited to medical marijuana
Several of those ETFs and underlying cannabis stocks spiked on the news Thursday but settled back quickly, however. That may be because investors quickly realized that the federal reclassification was only for medical use of cannabis, not recreational.
But in fact, there’s good news for recreational use, also. The DOJ order also established a June hearing to consider reclassifying recreational marijuana. The changes, to both medical and recreational use, are driven by an executive order President Trump signed last December for U.S. agencies to begin the process of downgrading cannabis to a less restrictive category of drugs.
Trump is clearly disposed toward greater use of illegal or once-illegal drugs. Last weekend, he signed an order directing the Food and Drug Administration to ease restrictions on and speed up reviews of certain psychedelic drugs, cutting their review times to one or two months from the previous six to 10 months.
Author: MScannaBIZ
MScannaBIZ is here to make sure patients, businesses, and professionals never get left behind. We started in 2022 as a Mississippi cannabis news source, covering the legislation, the licenses, and the launches that shaped the state's emerging industry. As the Mississippi Medical Cannabis Program took shape, so did we, evolving into the state's most comprehensive cannabis platform. Today MScannaBIZ is Mississippi's premier destination for finding licensed dispensaries, booking certified cannabis doctors, discovering deals and events, and staying informed with the latest industry news. With over 300 businesses in our directory and new listings added daily, we're the most complete cannabis resource in the state. Our mission is simple make Mississippi's medical cannabis ecosystem accessible, transparent, and thriving for everyone in it.