HHS calls for easing restrictions on marijuana, sending cannabis stocks higher

HHS calls for easing restrictions on marijuana, sending cannabis stocks higher


James Romano trims flower while working in CommCans processing facility in Medway, MA on Oct. 27, 2021. Beneath the trimmed flower is a tray collecting shake, cannabis flower that has naturally broken down through handling. Shake can be used in CommCans pre-rolled joints or made into edibles.

Erin Clark | Boston Globe | Getty Images

The U.S. Health and Human Services Department has recommended reclassifying marijuana as a lower-risk drug, which would in turn ease restrictions on the budding business, a spokesperson for the Drug Enforcement Agency told CNBC on Wednesday. 

Marijuana is currently a Schedule I drug under the Controlled Substances Act, meaning it’s deemed to have no currently accepted medical use and a high potential for abuse. Despite being legalized for recreational use in nearly half of states, marijuana’s federal classification alongside drugs like heroin and LSD has hindered the industry’s growth.

After enjoying a sales surge during the pandemic, the industry is in free-fall as investors turn away and capital dries up. The industry has also been barred from accessing most banking services, or from being traded across state lines, resulting in a glut of cannabis in many states and a drop in prices.

A federal reclassification could potentially expand the market for marijuana, which is a multibillion-dollar industry in the U.S. and a cash crop in many newly legalized states.

The news sent shares of several cannabis companies, including Canopy Growth, Tilray Brands and Cronos Group, jumping Wednesday. The recommendation was first reported by Bloomberg.

In a letter addressed to DEA officials, HHS called for marijuana to be reclassified as a Schedule III drug under the Controlled Substances Act, a DEA spokesperson told CNBC. Schedule III is defined as drugs with a moderate to low potential for physical and psychological dependence.

The DEA, which regulates controlled substances, has the final authority to reschedule marijuana. The agency will now initiate a review of the drug, the spokesperson said.

A lack of federal regulation has meant cannabis businesses in states where recreational sales are legal still can’t access traditional banking services or institutional capital. A congressional bill called the Secure and Fair Enforcement Banking Act, or SAFE, would lift such restrictions but hasn’t made it through the Senate, despite passing in the House several times.

Patrick Rea, managing director at cannabis investment firm Poseidon Garden Ventures, said his fund is “cautiously optimistic” for the changes a reclassification could bring to the industry.

“Certainly moving cannabis off of Schedule 1 is the right decision and long overdue,” Rea said in a statement. “Though a full descheduling would be preferred and likely most appropriate for cannabis, we welcome smart decisions and progress towards full legalization and regulation in the legal cannabis industry.”



Source

Healthy Returns: Medicare, Medicaid will reportedly pilot covering obesity drugs – a potential win for drugmakers
Health

Healthy Returns: Medicare, Medicaid will reportedly pilot covering obesity drugs – a potential win for drugmakers

A combination image shows an injection pen of Zepbound, Eli Lilly’s weight loss drug, and boxes of Wegovy, made by Novo Nordisk. Hollie Adams | Reuters A version of this article first appeared in CNBC’s Healthy Returns newsletter, which brings the latest health-care news straight to your inbox. Subscribe here to receive future editions. For […]

Read More
Hinge Health stock pops 6% after first quarterly report since IPO
Health

Hinge Health stock pops 6% after first quarterly report since IPO

Hinge Health co-founders, Gabriel Mecklenburg and Daniel Perez celebrate its initial public offering at the New York Stock Exchange on May 22, 2025. NYSE Shares of Hinge Health popped 6% in extended trading on Tuesday after the digital physical therapy company reported quarterly results for the first time since its debut on the New York […]

Read More
Trump says pharma tariffs could eventually reach up to 250%
Health

Trump says pharma tariffs could eventually reach up to 250%

U.S. President Donald Trump talks to members of the press at Lehigh Valley International Airport in Allentown, Pennsylvania, U.S., August 3, 2025. Ken Cedeno | Reuters President Donald Trump told CNBC’s “Squawk Box” on Tuesday that planned tariffs on pharmaceuticals imported into the U.S. could eventually reach up to 250%, the highest rate he has […]

Read More