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It's déjà vu all over again 

Back on September 4th, 2023, I wrote that the U.S. Department of Health & Human Services (HHS) had 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. If implemented, such a reclassification would:

• • substantially ease banking requirements for American MSO companies,
  • be a step toward:
    • wider legalization by additional states,
    • allowing major U.S. stock exchanges to list MSOs on their exchanges, and
    • allowing Canadian Licensed Producers (LPs) to begin selling their products in the United States.
  • That last possibility resulted in:
    • the average stock price of Canada's 5 largest licensed producers (LPs) as tracked in munKNEE's Canadian Cannabis LPs Portfolio soaring by 122% within 3 weeks (i.e., by mid-September)
    • but that enthusiasm quickly evaporated with the Portfolio falling 37% by September 29th and declining further in October to end down 14% from its price at the end of August when the announcement was initially made.
    • the average stock price of America's 7 largest multi-state operators (MSOs) as tracked in munKNEE's American Cannabis MSOs Portfolio soaring by 94% within 3 weeks  
    • but that enthusiasm also quickly evaporated with the Portfolio falling by 13% by September 29th and declining further in October to just 12% above its price at the end of August.

On April 30th, 2024, it was reported by the Associated Press and NBC News, citing multiple sources, that the DEA plans to follow a recommendation from the Department of Health and Human Services that would end marijuana’s decades-long classification as a Schedule I drug to a less stringently regulated Schedule III drug that can be prescribed with a prescription. The change, if finalized, would mark the first time marijuana’s classification has been changed in 50 years and the first time the U.S. government would acknowledge marijuana has potential medical benefits. According to NBC, the change would allow marijuana’s potential medical uses to be studied, and would allow pharmaceutical companies to be involved in selling marijuana in states that have legalized it.

The munKNEE's Canadian Cannabis LP Portfolio jumped 52% Tuesday (April 30th) and the American Cannabis MSOs Portfolio was up 27% on the day with the news (both Portfolios went UP 35.4% on average) but it remains to be seen how soon the enthusiasm will wane. Perhaps this mega jump in the price of cannabis stocks is an opportunity to sell at this new high before it does just.

Below is the extent to which the stocks in *munKNEE's Canadian Cannabis LPs Portfolio and the American Cannabis MSOs Portfolio increased Tuesday, in descending order:

1. Canopy Growth* (CGC): UP 78.8%
2. Aurora* (ACB): UP 46.0%
3. Ayr Wellness (AYRWF): UP 39.3%
4. Tilray* (TLRY): UP 38.8%
5. Trulieve Cannabis (TCNNF): UP 34.9%
6. TerrAscend (TSNDF): UP 25.3%
7. Verano (VRNOF): UP 24.4%
8. Curaleaf (CURLF): UP 22.6%
9. Green Thumb (GTBIF): UP 22.3%
10. Cronos* (CRON): UP 15.3%
11. Cresco Labs (CRLBF): UP 13.8%
12. OrganiGram* (OGI): UP 13.4%
    • Average: UP 35.4%

More By This Author:

April Recap: Canadian Cannabis LP Portfolio Jumped 8%
April Recap: Conservative "Cannabis" Stocks Portfolio Down 3%
April Recap: Cloud Computing (SaaS) Portfolio Down 6% In April, Up 2.5% This Week