Bill Schmitt Jr. (C) joins cannabis reform protesters outside the White House to call on U.S. President Joe Biden “to take action on cannabis clemency before the November general election” October 24, 2022 in Washington, DC.
Win Mcnamee | Getty Images
Pot stocks failed to light up for a second day on Monday even after President Donald Trump confirmed he’s considering an executive order loosening regulations on marijuana.
The Amplify Seymour Cannabis ETF (CNBS) took a leg up in afternoon trading after Trump said he was weighing reclassifying the drug. Still, the fund was down nearly 7% with investors taking profits following a surge of more than 50% on Friday.
When asked Monday if he was looking at an executive order on rescheduling weed, Trump responded “We are considering that.”
“A lot of people want to see it the reclassification, because it leads to tremendous amounts of research that can’t be done unless you reclassify,” he said. “So we are looking at that very strongly.”
Trump’s comment comes after reports on Friday said the president was thinking about instructing federal agencies to reclassify marijuana as a less-regulated Schedule III drug from a Schedule I substance. A person familiar with the matter told CNBC an order from the White House could come as soon as Monday.
The reports ignited a rally in the sector on Friday that drove the Amplify Seymour fund to its best day on record. The ETF swung into positive territory for the year, putting it on track to snap a four-year losing streak.
Industry insiders have long expected this change in classification, which would move cannabis out of a group of drugs that includes heroin to a cohort alongside steroids and Tylenol with codeine. Trump floated a change in marijuana’s classification in August.
But they said there’s more optimism that enough momentum exists to get such a move — which could help warm up banks and big investors to the sector — across the finish line.
“I’m a lot more optimistic than I ever have been,” Tilray CEO Irwin Simon told CNBC on Friday.
Weed producers Tilray Brands and Canopy Growth slid 10% and 4.6%, respectively, in Monday’s session. Retailer SNDL tumbled more than 13%.
— CNBC’s Kevin Breuninger and Brandon Gomez contributed reporting.
