Following a social media post by US President Donald Trump over the weekend, which suggested potential health benefits from cannabidiol use, shares of cannabis companies rose in early premarket trading on Monday, according to a Reuters report.
In a post on Sunday, Trump suggested that cannabidiol (CBD) holds significant promise for the future of senior healthcare.
He posited that CBD could “revolutionize senior healthcare” by offering a natural and effective approach to managing age-related health issues.
Trump highlighted its potential to help reduce the progression of various diseases often associated with aging, citing its demonstrated efficacy as an alternative to traditional prescription drugs.
Growing interest
This statement underscores a growing interest in alternative therapies and a potential shift in how certain compounds are perceived within the medical community, particularly concerning geriatric care.
His remarks suggest a belief that CBD could provide a less invasive and potentially more holistic approach to improving the quality of life for seniors.
In early August, Trump indicated that his administration was considering a reclassification of marijuana.
This potential change in classification could have significant implications, potentially leading to a reduction or easing of criminal penalties associated with the use of the drug.
Such a move would represent a notable shift in federal policy regarding marijuana, which has historically been classified as a Schedule I controlled substance, alongside drugs like heroin, with a high potential for abuse and no accepted medical use.
A reclassification could open the door for further research into its medical applications and potentially lead to changes in state-level regulations and industries surrounding cannabis.
Shares surge
Shares of several major US-listed cannabis companies experienced a significant premarket surge, with Canopy Growth and Tilray Brands leading the charge.
Both companies saw their stock prices jump by approximately 20% each before the market opened.
This strong performance extended to other key players in the cannabis sector, as Cronos Group and Aurora Cannabis also reported substantial gains, each adding 13.3% to their share values.
This widespread increase across prominent cannabis stocks suggests a positive sentiment or significant development impacting the industry as a whole, potentially driven by news, regulatory changes, or market speculation.
Investors will closely watch these companies as the cannabis market continues to evolve.
Additionally, the AdvisorShares Pure US Cannabis exchange-traded fund has seen a remarkable surge, climbing 20.6%. This places it on track to achieve its largest quarterly gain ever, estimated at approximately 70%.
“MSOS, the largest US marijuana-focused ETF, is indicated up 20% at the open and benefiting from President Trump’s surprise Sunday support for the potential benefits of CBD, with any support going a long way for this beleaguered listed sector,” Ben Laidler, head of equity strategy at Bradesco BBI, was quoted in the report.
Reclassifying the drug would also eliminate the tax burden imposed by Section 280E, which currently prevents cannabis companies from claiming standard business deductions.
Resolving this tax barrier could facilitate the listing of cannabis companies on US stock exchanges, thereby improving their access to capital markets.
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