Bill Schmitt Jr. (C) joins cannabis reform protesters outside the White House to call on US President Joe Biden “to take action on cannabis pardon before the November general election,” on October 24, 2022 in Washington, DC.
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Marijuana stocks failed to rise for a second straight day on Monday, even after President Donald Trump confirmed he is considering an executive order loosening marijuana regulations.
He Amplify Seymour Cannabis ETF (CNBS) took advantage in afternoon trading after Trump said he was considering reclassifying the drug. Still, the fund fell nearly 7% and investors took profits after a more than 50% rise on Friday.
Asked Monday if he was considering an executive order to reschedule marijuana, Trump responded: “We are considering it.”
“A lot of people want to see reclassification, because it leads to enormous amounts of research that can't be done unless you reclassify,” he said. “So we're looking at this very carefully.”
Trump's comment comes after reports on Friday said the president was considering directing federal agencies to reclassify marijuana as a less regulated Schedule III drug from a Schedule I substance. A person familiar with the matter told CNBC that an order from the White House could come as early as Monday.
The reports sparked a rally in the sector on Friday that took the Amplify Seymour fund to its best day on record. The ETF entered positive territory during the year, putting it on track to snap a four-year losing streak.
Industry insiders have long awaited this change in classification, which would move cannabis out of a group of drugs that includes heroin and into a cohort alongside steroids and Tylenol with codeine. Trump proposed a change in marijuana classification in August.
But they said there is more optimism that there is enough momentum to get such a move, which could help bring banks and big investors into the sector, over the finish line.
“I am much more optimistic than ever” tilray CEO Irwin Simon told CNBC on Friday.
Weed Growers Tilray and Canopy growth fell 10% and 4.6%, respectively, in Monday's session. Retailer SNDL fell more than 13%.
—CNBC's Kevin Breuninger and Brandon Gomez contributed reporting.
