President Trump's Major Marijuana Move: What It Means for Canopy Growth, Green Thumb, and Tilray

Yahoo Finance ·

At the end of last year, the cannabis industry was rocked by a significant change in the laws covering the drug. This, however, wasn't as momentous as it first seemed. Let's shine a grow light on how it will affect -- or not -- three prominent marijuana companies, Canada-based Canopy Growth ( CGC 2.71% ) and Tilray Brands ( TLRY 0.69% ) , and the U.S. multi-state operator (MSO) Green Thumb Industries ( GTBIF 0.83% ) . For those unfamiliar, the federal government sorts controlled substances into five so-called schedules. Schedule I is for substances considered the most dangerous and with the least medicinal value. Harmfulness declines, and utility rises as we descend through Schedules II to V. Last December, President Donald Trump issued an executive order directing the Drug Enforcement Administration (DEA) to reschedule pot from Schedule I to Schedule III. This past April, the move was enacted by acting Attorney General Todd Blanche. That was a great triumph for the marijuana business , and a boon to every weed consumer in this country.

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President Donald Trump's executive order has downgraded cannabis from a Schedule I to a Schedule III controlled substance. This move recognizes the medicinal value of cannabis and lowers its risk assessment, significantly resolving legal uncertainties for the industry. Investors are watching to see if this deregulation will lead to improved profitability and market share expansion for major companies such as Canopy Growth, Tilray, and Green Thumb.

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The reclassification of cannabis marks a major regulatory shift that could fundamentally change the financial landscape for the industry. By moving to Schedule III, companies gain relief from restrictive tax codes like 280E, which previously hindered net income growth. This institutional validation is expected to attract more traditional capital and institutional investors into the sector.

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