The Tilray Brands Inc (NASDAQ: TLRY) stock price rose 10.83% yesterday and was up 3.38% during premarket trading after news broke that the Drug Enforcement Agency (DEA) was considering whether it should reclassify marijuana as a less dangerous drug, which made cannabis stocks soar.
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Yesterday, Bloomberg reported that the U.S. Department of Health and Human Services (HHS) had written to the Drug Enforcement Agency asking the DEA to classify cannabis as a Schedule III drug, which would significantly depart from its current classification as a Schedule I drug.
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The letter seen by Bloomberg was dated Tuesday, August 29, 2023. The letter also mentioned other drugs, including Ecstasy and heroin. Other drugs that are classified as Schedule III drugs are Tylenol and Codeine.
A spokesperson for the DEA confirmed that the agency was in receipt of the letter saying the “HHS conducted a scientific and medical evaluation for consideration by DEA.” According to the DEA spokesperson, the HHS was acting on orders from President Joe Biden.
However, the “DEA has the final authority to schedule or reschedule a drug under the Controlled Substances Act. DEA will now initiate its review.” Tilray stock is trading almost flat for the year, down a mere 3.97%.
The letter to the DEA serves as a significant boost for cannabis stocks that needed the boost given the winter that the stocks had faced in recent years following the boom a few years ago when many expected the US to legalise cannabis on a federal level.
The ascension of President Joe Biden to power in 2021 led to a doubling in the Tilray and Canopy Growth share price between November 2020 and February 2021. The hope of legalisation still exists, although the momentum to legalise the drug had died down recently.
However, the question investors in the sector should be asking is, will the latest efforts yield any progress towards legalising cannabis within the entire US, which could significantly boost the entire sector?
Only time will tell. As for now, the boost from the HHS letter to the DEA seems to have fizzled out in a day since today’s gains pale compared to yesterday’s.
Tilray (TLRY) stock price.
The Tilray (TLRY) stock price edged 3.38% higher to $2.75, adding to yesterday’s 10.83% gain.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.