President Trump expresses consideration for downgrading cannabis's danger classification, leading to a surge in cannabis stock prices.
In a recent development, United States President Donald Trump has announced that his administration is contemplating the reclassification of cannabis as a less dangerous drug. This move, if executed, could significantly alter the legal landscape of cannabis in the country.
Currently, cannabis is classified as a Schedule I controlled substance under the Drug Enforcement Administration (DEA), indicating no accepted medical use and a high potential for abuse. However, the Biden administration initiated a formal process to reclassify cannabis to Schedule III in 2023, following the Department of Health and Human Services' (HHS) recommendation based on scientific and medical evaluations that demonstrate cannabis has accepted medical utility.
If reclassified, cannabis would move from the most restrictive category, which includes drugs like heroin and LSD, to a category that recognises its medical use. Schedule III drugs, such as ketamine and anabolic steroids, are considered to have moderate to low potential for dependence and accepted medical uses.
This change could have several implications. For instance, it would facilitate broader medical research by reducing administrative barriers that have historically limited federally approved cannabis studies. It would also recognise cannabis as a medicine under federal regulation, potentially encouraging more FDA-approved cannabis-based drugs.
Moreover, Schedule III classification would allow state-licensed cannabis businesses to take standard federal tax deductions and write-offs, which are currently prohibited due to Schedule I status. This could significantly improve the financial viability and regulatory clarity for cannabis businesses.
However, it's important to note that while states may have already legalized cannabis medicinally or recreationally, federal rescheduling would help reconcile conflicts between state laws and federal prohibition, particularly regarding banking, tax, and law enforcement issues. Some advocates argue for full descheduling (removal from the Controlled Substances Act) rather than rescheduling to fully resolve these conflicts.
Trump, in his statements, has expressed a nuanced view on the subject, acknowledging both the potential benefits and concerns. He has mentioned that he has heard "great things" about medical-use cannabis, but also expressed concerns about its potential negative effects on children and older adults.
The President's remarks have sparked a surge in the stocks of cannabis-related businesses. Tilray Brands, Village Farms International, and Canopy Growth Corp saw significant increases, with Tilray Brands jumping nearly 42 percent, Village Farms International up about 34 percent, and Canopy Growth Corp closing up about 26 percent.
In conclusion, the ongoing federal review nears a potential decision to reclassify cannabis as Schedule III. If enacted, this would ease federal restrictions, recognising its medical use, facilitate research, and improve economic conditions for cannabis businesses under federal law. The President's stance on the issue remains complex, reflecting the nuanced debate surrounding cannabis in the United States.
References:
- NBC News
- Forbes
- CNN
- The Hill
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