United States: The US Drug Enforcement Administration has made a historic decision to reclassify marijuana as a less harmful drug. As a result, Cannabis companies’ stock has surged.
Although it does not outright legalize recreational use, the US Justice Department’s recommendation on Tuesday to classify cannabis as a schedule three drug—alongside ketamine and Tylenol with codeine— paves the way for less severe penalties and increased tax benefits for private investment in the sector.
Cannabis is now classified as a schedule one substance, meaning it is on par with heroin and LSD, which means businesses cannot deduct regular business expenses at tax time.
The US-based Cronos Group saw a roughly 40 percent increase in shares, while the Canadian companies Canopy Growth Corporation and Cronos Group saw increases of 80.02 percent and 15.71 percent, respectively.
Following a review that US President Joe Biden started, the proposed modification will be approved by the White House Office of Management and Budget before going into effect. There will also be a public comment period and an administrative judge review process.
The action contributes to closing the growing gap between federal law and the regulations in about 40 states where medicine is allowed in some capacity.
In October 2022, Biden declared that thousands of Americans convicted of marijuana possession would receive pardons and started a study of federal marijuana laws.
“Too many lives have been upended because of our failed approach to marijuana. It’s time that we right these wrongs,” Biden said in December.
Despite the fact that the cannabis market is predicted to be worth tens of billions of dollars in the US, the drug remains prohibited by federal law as a controlled substance, which hinders interstate trade, prevents companies from using banking services, and restricts financing for medical research.
It has also been claimed that the drug’s prohibition, which began with a countrywide ban in 1937, has made racial inequalities in the legal system worse.
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