Major cannabis ETFs recorded their best-ever weekly gains on Friday after media reports indicated that President Donald Trump will soon issue an executive order to reclassify marijuana as a less dangerous drug, a move that could benefit the industry.
AdvisorShares Pure US Cannabis (MSOS), which represents U.S. multi-state operators, and other major cannabis ETFs, AdvisorShares Pure Cannabis ETF (YOLO), Amplify Alternative Harvest ETF (MJUS), and Amplify Seymour Cannabis ETF (CNBS) all posted their best weekly rallies in reaction to the news.
Among leading MSOs, Cresco Labs (CRLBF), Green Thumb Industries (GTBIF), and Trulieve Cannabis (TCNNF) recorded their best-ever weekly gains, while TerrAscend (TSNDF) and Curaleaf Holdings (CURLF) also posted double-digit percentage gains.
Tilray (TLRY) closed ~65% higher, its best weekly gain ever, standing out from other leading Canadian Licensed Producers such as Canopy Growth (CGC), Cronos (CRON), Aurora Cannabis (ACB), SNDL Inc. (SNDL), and OrganiGram Holdings (OGI).
In 2024, the DoJ proposed to move cannabis from its current group of Schedule I, which includes LSD and heroin under the Controlled Substances Act, to Schedule III, where it will be categorized alongside therapeutics such as ketamine.
Trump’s action comes as a regulatory process to implement the reclassification remains stalled at the DEA, following a legal challenge filed by several pro-rescheduling parties.
Trump’s executive order, expected as early as Monday, will mark “a major regulatory milestone for the industry,” Julian Lin, Seeking Alpha Investing Group Leader for Best Of Breed Growth Stocks, wrote.
“This is highly significant for the financials of the cannabis operators,” he added, noting that rescheduling will allow marijuana firms, which are currently not able to deduct operating expenses, to pay more normal income tax rates.