Shares of pot companies rose on Monday after U.S. President Donald Trump advocated the potential benefits from the use of cannabidiol in senior healthcare in a social media post, opens new tab.
Trump had said last month his administration was looking to reclassify marijuana, which could also result in potentially easing criminal penalties around its use.
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Hemp-derived cannabidiol (CBD) could “revolutionize senior healthcare” by helping reduce disease progression and was shown as an alternative to prescription drugs, he said in a post on Truth Social on Sunday.
U.S.-listed shares of Canopy Growth (WEED.TO), opens new tab, gained 18.3% and Tilray Brands (TLRY.O), opens new tab jumped 42%, while Cronos Group (CRON.TO), opens new tab added 15.5% and Aurora Cannabis (ACB.TO), opens new tab, gained 25.4%.
Exchange-traded funds by AdvisorShares (MSOS.P), opens new tab surged 21.8% and Roundhill gained 21.6% and are both on track for their biggest quarterly gains on record of more than 70% each.
“MSOS, the largest U.S. marijuana-focused ETF, is… benefiting from President Trump’s surprise Sunday support for the potential benefits of CBD, with any support going a long way for this beleaguered listed sector,” said Ben Laidler, head of equity strategy at Bradesco BBI.
Regulations around the commercial use of hemp and CBD were significantly eased through the enactment of the Agriculture Improvement Act during Trump’s first term.
However, marijuana remains listed as a Schedule I substance, under the Controlled Substances Act, meaning it has a high potential for abuse and no current accepted medical use.
Former President Joe Biden had directed the Department of Health and Human Services to review marijuana’s status, leading the agency to recommend moving it to Schedule III, a category for drugs with moderate to low potential for dependence.
Trump “already hinted that they were planning to reclassify it. This doesn’t mean it’s legalizing the drug, but it does reduce some of the burden on the companies,” said Daniela Hathorn, senior market analyst at Capital.com.
