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Stocks related to cannabis surged during the premarket trading following the mention of cannabidiol (CBD) as a possible senior healthcare tool by US President Donald Trump. His social media post on the weekend proposed that CBD might help slow the progression of the disease, and it may be used as an alternative to prescription drugs.
The announcement came after previous statements in August, when Trump said his administration was considering cannabis reclassification. That action would facilitate punishment related to the use of marijuana and pave the way to wider market involvement. The most recent post has revitalized interest in CBD-based healthcare solutions, particularly among older demographics.
Stocks of large cannabis manufacturers have shot up significantly. Canopy Growth and Tilray Brands both increased by approximately 20%, and Cronos Group and Aurora Cannabis increased by over 13%. The moves indicated new hope that federal reforms would save a troubled industry.
The AdvisorShares Pure US Cannabis exchange-traded fund (MSOS) also increased by over 20% before the market. It was estimated that it would achieve an all-time quarterly increase of approximately 70%, highlighting the fresh impetus of cannabis-related investments. Ben Laidler, Bradesco BBI's equity strategy head, believes that Trump's support for CBD sent a strong signal, providing the sector with a much-needed boost.
The reclassification of cannabis may eliminate some significant financial challenges that the industry may encounter. Now, cannabis companies are unable to claim the regular business deductions as defined in Section 280E of the US tax code, posing a significant financial strain. Lifting that barrier would enable firms to work under the same conditions as others.
Analysts believe that a move like this may also pave the way for cannabis firms to list their shares on US stock exchanges. This would increase access to capital and improve liquidity in the sector, which legal and regulatory constraints have strained. Market commentators emphasize that in the long run, the performance will be determined by the pace of policy change in Washington, although enthusiasm is high.
