Cannabis stocks rally as DOJ proposes reclassifying marijuana

Cannabis stocks rallied Thursday afternoon after the U.S. Department of Justice formally proposed reclassifying marijuana as a less risky schedule III drug.

In a statement put out early Thursday afternoon, the DOJ said the U.S. Attorney General “has submitted to the Federal Register a notice of proposed rulemaking initiating a formal rulemaking process to consider moving marijuana from a schedule I to a schedule III drug under the Controlled Substances Act.”

The DOJ said the move reflects marijuana’s use as an accepted medical treatment in the U.S.

The department said the proposal starts the reclassification process. The Drug Enforcement Administration will next gather information and views from the public on the matter before determining the “appropriate schedule” for the drug. During that time, the drug will remain classified as a schedule I controlled substance.

Currently, marijuana is classified as a schedule I drug, meaning it is considered to be of high risk for abuse and has no accepted medical use. Schedule III substances are considered to be less risky and include drugs such as ketamine and Tylenol with codeine.

President Biden first announced the rescheduling news via video Thursday afternoon.

Shares of several cannabis companies rallied amid the news, including Canopy Growth (NASDAQ:CGC), Aurora (ACB), Ayr Wellness (OTCQX:AYRWF), Leafly (LFLY), Cresco Labs (OTCQX:CRLBF), Acreage (OTCQX:ACRHF) Cronos (CRON), Verano (OTCQX:VRNOF), Tilray (TLRY), TerrAscend (OTCQX:TSNDF) and Trulieve (OTCQX:TCNNF). Also gaining were AdvisorShares Pure US Cannabis ETF (NYSEARCA:MSOS), AdvisorShares Pure Cannabis ETF (NYSEARCA:YOLO), Amplify Seymour Cannabis ETF (NYSEARCA:CNBS) and Amplify International Harvest ETF (NYSEARCA:MJ).