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

CDC Director Susan Monarez ousted, four other leaders quit health agency
Health

CDC Director Susan Monarez ousted, four other leaders quit health agency

Susan Monarez, President Donald Trump’s nominee to be the Director of the Centers for Disease Control and Prevention (CDC), testifies during her confirmation hearing before the Senate Committee on Health, Education, Labor, and Pensions in the Dirksen Senate Office Building on June 25, 2025 in Washington, DC. Kayla Bartkowski | Getty Images Centers for Disease […]

Read More
FDA approves new Covid shots with limits on who can get them, as RFK Jr. changes vaccine precedents
Health

FDA approves new Covid shots with limits on who can get them, as RFK Jr. changes vaccine precedents

Pfizer’s Covid vaccine Comirnaty, seen at a CVS Pharmacy in Eagle Rock, California, Sept. 14, 2023. Irfan Khan | Los Angeles Times | Getty Images The Food and Drug Administration on Wednesday approved the latest round of Covid vaccines in the U.S., but set new limits on who can get them. The agency ended its […]

Read More
Healthy Returns: Eli Lilly’s chief scientific officer breaks down the latest obesity pill data
Health

Healthy Returns: Eli Lilly’s chief scientific officer breaks down the latest obesity pill data

The Eli Lilly headquarters in Indianapolis, Indiana, on Aug. 15, 2024. AJ Mast | Bloomberg | Getty Images 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. Eli Lilly‘s closely watched obesity pill is inching closer […]

Read More