What a great week in a terrible year for cannabis stocks!  Here's what happened.

Last Wednesday the U.S. Department of Health & Human Services (HHS) requested that the Drug Enforcement Administration reclassify marijuana's drug status to that of a Schedule III (i.e. lower-risk) substance based on a recent Food and Drug Administration review. Such a removal of the draconian 280E section of the tax code would substantially ease banking requirements for MSO companies and investors responded with a 39% jump in the industry's average stock price (and a 44% increase in the average stock price of the industry's 7 largest multi-state operators ( MSOs) as tracked in munKNEE's American Cannabis MSO Index).

Cannabis is currently classified as a schedule I drug under the Controlled Substances Act, meaning it supposedly has a high potential for abuse and has no accepted medical use, along with drugs like heroin and LSD. As such, cannabis is completely illegal in almost 10 states and being completely illegal at the federal level.

HHS is recommending that cannabis be reclassified to say it has a moderate to low potential for dependence and a lower abuse potential. Such a move would put it in a class with ketamine and testosterone and be a first step toward wider legalization, a move backed by a majority of Americans. If implemented it would allow major U.S. stock exchanges to list MSOs on their exchanges and potentially allow foreign companies to begin selling their products in the United States. That last possibility resulted in a 17% jump in Canada's average cannabis stock price last week (and a 20% increase in the average stock price of Canada's 5 largest licensed producers (LPs) as tracked in munKNEE's Canadian Cannabis LP Index) many of which would be expected to expand into the United States if federal legalization follows there. A follow-up article on the stock performances of the 5 constituents in the Canadian Cannabis LP Index will be posted later this week.

Below are the changes in the stock prices of the 7 constituents last week in descending order of performance:

1. Columbia Care (CCHWF): up 82.9%
2. Trulieve Cannabis (TCNNF): up 63.3%
3. Cresco Labs (CRLBF): up 50.1%
4. Verano Holdings (VRNOF): up 42.6%
5. Green Thumb (GTBIF): up 39.7%
6. Curaleaf Holdings (CURLF): up 32.4%
7. TerrAscend Corp. (TSNDF): up 25.5%

The average increase in our American Cannabis MSO Index last week was 44.1% and, as mentioned in the introduction, in a 39% jump in the Pure U.S. Cannabis ETF (MSOS).

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