Cannabis stocks on watch as DEA sets hearing on marijuana rescheduling

Cannabis-related stocks will come under investor scrutiny on Tuesday after the Drug Enforcement Administration (DEA) scheduled a public hearing to consider different views on the U.S. Justice Department’s recent proposal to reclassify marijuana as a less dangerous drug.

The hearing scheduled for Dec. 02 prolongs the administrative process under which cannabis, currently categorized alongside dangerous drugs such as heroine in Schedule I of the Controlled Substances Act (CSA), is set to be grouped with medications such as ketamine in Schedule III.

Media reports on proposed rulemaking sent cannabis stocks sharply higher in late April. While the DEA has often conducted hearings on major regulatory reforms, in the case of cannabis rescheduling, some industry experts expected the agency to move to rulemaking directly.

Canadian Licensed Producers, Canopy Growth (CGC), Tilray (TLRY), Aurora Cannabis (ACB), and SNDL Inc. (SNDL) are already trading lower in the premarket. OrganiGram Holdings (OGI) and Cronos (CRON) also operate in the Canadian cannabis market.

Stocks to watch include their U.S. counterparts, Curaleaf Holdings (OTCPK:CURLF), Acreage Holdings (OTCQX:ACRHF), Cresco Labs (OTCQX:CRLBF), Green Thumb Industries (OTCQX:GTBIF), Trulieve Cannabis (OTCQX:TCNNF), Ayr Wellness (OTCQX:AYRWF), TerrAscend (OTCQX:TSNDF), Jushi Holdings (OTCQX:JUSHF), and Verano Holdings (OTCQX:VRNOF).

Cannabis-related ETF AdvisorShares Pure US Cannabis ETF (NYSEARCA:MSOS), representing U.S. MSOs, has lost ~11% premarket. Other cannabis ETFs include AdvisorShares Pure Cannabis ETF (YOLO), and ETFMG Alternative Harvest ETF(MJ), and Amplify Seymour Cannabis ETF (CNBS).