Marijuana Stocks Skyrocket Amidst Rescheduling Announcement
Since the HHS announcement on marijuana rescheduling, cannabis stocks have soared as investors gain renewed confidence in an industry that has been beleaguered by excessive regulation and taxation for years.
According to New Cannabis Ventures’ Global Cannabis Stock Index, global cannabis stocks have skyrocketed over 20% since the announcement late last month. This is overall as many Florida cannabis companies have seen their stock increase 100% to 200% in a short time.
Previously, cannabis stocks had dropped 90% since their peak in February 2021, and this type of stock increase hasn’t been seen since. Cannabis’ Schedule I classification has had a devastating impact on cannabis stocks. Just days prior to the HHS announcement, AdvisorShares–the country’s largest cannabis manager–shuttered its Poseidon Dynamic Cannabis ETF, halting trading operations on August 25th before liquidating assets on the first of September.
Co-founder Morgan Paxhia attributed the failure to the “dramatic shift in investor sentiment that has impacted the cannabis industry” as the result of IRS 280E taxation, excessive sales profits, and other regulations that have made cannabis less profitable for businesses and investors alike.
Although since the HHS announcement, investors have become far more optimistic, recognizing that if the DEA approves the recommendation, the cannabis industry is likely to thrive. Cannabis stocks have steadily risen in the weeks since the announcement, and analysts suggest that they have and will be bolstered further by American investors in response to news of the potential rescheduling and the SAFE Banking Act: “The US Cannabis MSOS ETF finished up 21.88%, while the global YOLO ETF gained 12.26%,” one report stated.
Leading companies include Ayr Wellness Inc, whose returns increased nearly 90% last week, and rose a total of 233.7% since the market opened on August 30th–the same day that the HHS announcement broke headlines nationwide. Likewise, Columbia Care reported gains of 52.6% last week alone. Alternative Harvest and AdvisorShares Pure US Cannabis have increased 47% and 56% respectively, which has left both companies now outperforming the Dow Jones Industrial Average and the S&P this quarter.
Top Marijuana Stock Movers
More to Come?
Following that chatter from .gov, investors were provided with further optimism. Not long after the rescheduling suggestion, the Senate announced that they will soon vote on the SAFE Banking Act, which protects financial institutions who partner with cannabis businesses from federal penalties and regulatory scrutiny. Credit cards, tax deduction like a normal business, and the ability to bank cash, this is huge.
