Cannabis stocks rebound amid DEA’s rescheduling review

Cannabis stocks have regained momentum as investors await a key decision from the Drug Enforcement Administration (DEA) regarding its ongoing review to reschedule marijuana from a high-risk category to a low-risk category.

After a lackluster performance throughout last year, AdvisorShares Pure US Cannabis ETF (NYSEARCA:MSOS), which represents the U.S. MSOs, has returned ~49% this year.

Other cannabis-related ETFs, such as AdvisorShares Pure Cannabis ETF (NYSEARCA:YOLO), ETFMG Alternative Harvest ETF (NYSEARCA:MJ), and Amplify Seymour Cannabis ETF (NYSEARCA:CNBS), have also regained value.

The rally began in August amid reports that the U.S. Department of Health and Human Services (HHS) recommended that the DEA reschedule marijuana from its current Schedule I category to Schedule III under the Controlled Substances Act (CSA).

The industry experts and investors are hopeful of a positive outcome if the rallying share prices of U.S. multistate operators are any indication.

Citing a source at the White House, Adrian Snead, an expert in cannabis banking and reforms, said Tuesday the Biden administration will likely announce a major cannabis-related policy decision as early as this week.

“I suspect it will be a rescheduling decision from DEA, but it could also be something more drastic,” Snead said, citing a high-ranking source linked to the government.

Snead, a partner legal firm at Porter Wright Morris & Arthur LLP, was tasked with drafting the SAFE Banking Act of 2017, and other cannabis-related legislation.

His remarks come after a group of Senate Democrats led by Elizabeth Warren (D-MA) and John Fetterman (D-PA) urged the DEA to completely deschedule marijuana despite its review for rescheduling.

U.S. MSOs: MedMen Enterprises (OTC:MMNFF), Curaleaf Holdings (OTCPK:CURLF), Acreage Holdings (OTCQX:ACRHF), Cresco Labs (OTCQX:CRLBF), Green Thumb Industries (OTCQX:GTBIF), Trulieve Cannabis (OTCQX:TCNNF), Ayr Wellness (OTCQX:AYRWF), TerrAscend (OTCQX:TSNDF), Clever Leaves (CLVR), Flora Growth (FLGC)

Canadian Licensed Producers: Canopy Growth (CGC), Tilray (TLRY), Cronos (CRON), Aurora Cannabis (ACB), SNDL Inc. (SNDL), OrganiGram Holdings (OGI)