Pot firms gain as US move to ease curbs boosts sentiment (updated)

Verano Holdings

31/08/2023 15:34

(Updates shares in paragraphs 5,6 and 7)
       Aug 31 (Reuters) - Shares of marijuana companies climbed
as much as 14% in morning trading on Thursday after the
Department of Health and Human Services recommended its
reclassification as a lower-risk substance following an 11-month
review.
    Marijuana remains illegal at the federal level even as
nearly 40 U.S. states have legalized its use in some form, and
the reclassification is seen as the first step toward wider
legalization that has the support of a majority of Americans.
    "Certainly moving cannabis off of Schedule 1 is the right
decision and long overdue. Though a full descheduling would be
preferred and likely most appropriate for cannabis," said       
 Patrick Rea, managing director of venture capital firm Poseidon
Garden Ventures. 
    The firm held investments in companies like retailer and
producer Green Thumb Industries  GTII.CD , and cannabis data
platform Flowhub, according to its website.
    Shares of cannabis firms Cronos Group  CRON.TO , OrganiGram
Holdings  OGI.TO , Aurora Cannabis  ACB.TO , Canopy Growth
 WEED.TO  jumped between 3% and 10%.
    Verano Holdings  VRNO.CD , Green Thumb Industries  GTII.CD ,
Cresco Labs  CL.CD  and Curaleaf Holdings  CURA.CD  and Goodness
Growth  GDNS.CD  rose between 5% and 14%.
    Pot stocks tracker AdvisorShares Pure US Cannabis ETF
 MSOS.K  gained 8.5%. It closed 21.2% higher on Wednesday
following the news, clocking its best day since Oct. 6, 2022.
    The recommendation was provided to the Drug Enforcement
Agency who has the final authority on rescheduling and will now
initiate its own review.
    Still, some analysts said the rescheduling would not be able
to address the banking or capital market access challenges for
cannabis companies.
    The SAFE Banking Act, a crucial legislation that would make
it easier for the cannabis industry to access banking services,
has failed to secure a Senate vote despite the House of
Representatives passing it seven times.
    "The main issue the industry will face revolves around the
crucial fact that over the last two decades, dozens of states
have developed their own cannabis laws (medical or recreational)
in the absence of cohesive federal regulation. And rescheduling
to Schedule III would not solve this mismatch," Bernstein
analyst Nadine Sarwat said.

 (Reporting by Arunima Kumar in Bengaluru; Editing by Sriraj
Kalluvila)
 ((Arunima.Kumar@thomsonreuters.com; Twitter: https://twitter.com/Aru_Kumar94
 ;))