Canopy Growth Soars 20% on Possible Schedule III Cannabis Reclassification
Canopy Growth shares surged over 20% after reports that President Trump’s executive order to reclassify cannabis to Schedule III may be implemented this week. The move could unlock Canopy Growth’s options to acquire U.S. cannabis brands like Wana and Acreage, driving significant valuation upside once federal restrictions lift.
1. Legal Reclassification Drive
President Trump’s December executive order directed the Department of Justice to reclassify cannabis from Schedule I to Schedule III, potentially restarting or waiving Drug Enforcement Administration hearings this week. The shift would lower federal restrictions, enabling broader financial services access and licensing changes for cannabis companies.
2. Market Reaction
Canopy Growth shares jumped over 20% on reports that the reclassification may proceed, while the AdvisorShares Pure Cannabis ETF climbed 21%. Despite the rally, the ETF remains far below its $52 peak in February 2021, trading near $5.20, underscoring how much ground the sector must reclaim.
3. Acquisition Upside
Canopy Growth holds options to directly acquire U.S. cannabis businesses such as Wana and Acreage, which control retail licenses in legal states. A successful reclassification could trigger these deals, substantially expanding Canopy Growth’s U.S. market footprint and driving future revenue growth.
4. Remaining Regulatory Hurdles
Reclassification does not equate to full federal legalization or permit interstate commerce, and banking restrictions may persist under current statutes. State-by-state regulations and potential DEA procedural delays continue to pose challenges for cannabis companies even after rescheduling.