CGC, TLRY, CRON: Cannabis Stocks Soar as Trump Reclassifies the Drug

Cannabis stocks such as Canopy Growth (CGC), Tilray Brands (TLRY), and Cronos Group (CRON) are up sharply on Dec. 18 after U.S. President Donald Trump signed an executive order to reschedule the recreational drug and ease restrictions around it.Claim 50% Off TipRanks Premium and Invest with Confidence Unlock hedge-fund level data and powerful investing tools designed to help you make smarter, sharper decisions Stay ahead of the market with the latest news and analysis so your portfolio is always positioned for maximum potential Trump's order reclassifies cannabis as a Schedule III drug, lowering it from its previous Schedule I status. Other Schedule I substances include highly addictive drugs with no accepted medical use, such as heroin. Lower level Schedule III substances are considered to have reduced potential for abuse such as Tylenol with Codeine in it. Trump's reclassification of cannabis is being applauded as a long-awaited milestone. However, the executive order stops short of permitting legalized recreational sales of the drug. In a White House ceremony, Trump stressed that the executive order doesn't legalize cannabis and that he "in no way sanctions its use as a recreational drug." Easing of Cannabis Restrictions In the executive order signing ceremony, Trump and U.S. public health officials said that the reclassification would enable researchers to more easily study the effects of cannabis and its potential medical benefits. Still, U.S.-listed shares of cannabis companies, many of which are based in Canada, rose between 3% and 6% on news of the reclassification. The industry has waited years for cannabis to be reclassified in the U.S. and restrictions around its use eased. In the meantime, traders and investors have largely abandoned cannabis stocks. The AdvisorShares cannabis ETF has declined more than 85% since 2021. Is TLRY Stock a Buy? The stock of Tilray has a consensus Moderate Buy rating among three Wall Street analysts. That rating is based on two Buy and one Sell recommendations issued in the last three months. The average TLRY price target of $7.00 implies 44.75% downside from current levels.