Shares of cannabis companies, including Tilray Brands (NASDAQ: TLRY), surged Tuesday amid reports of the U.S. Department of Justice (DOJ) potentially reclassifying marijuana to a lower-risk category.
The U.S. Department of Justice (DoJ), which oversees the Drug Enforcement Administration (DEA), has recommended Reutersreclassifying cannabis from Schedule I to Schedule III. This change suggests that cannabis has a lower potential for physical and psychological dependence compared to drugs in Schedule I, which authorities consider to have a high potential for abuse.
This proposal, if finalized, could mark a notable shift in federal cannabis policy, possibly the most significant in 40 years. The proposal is currently under review by the White House Office of Management and Budget to complete the rule-making process.
However, it’s important to note that this reclassification does not mean marijuana will be legalized for recreational use at the federal level. Instead, it signals a potential change in how the government regulates cannabis.
This development has stirred investor interest, reminiscent of the surge seen in U.S.-listed marijuana companies’ shares following Canada’s legalization of recreational marijuana in 2019. However, the revenue figures failing to meet inflated expectations tempered the optimism in subsequent years, leading to a decline in valuations.
Tilray Brands (NASDAQ: TLRY) Stock Reaction
TLRY stock soared 39.55% to close at $2.47 on Tuesday. Its value has risen by 34.24% this week. Trading activity has witnessed 145,036,762 (145.03 million) shares changing hands, well above the average daily volume of 29.69 million.
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