There was a recent increase in cannabis stocks last week following recommendations from the United States’ Health and Human Services department proposing changes to federal marijuana laws. However, these are only recommendations and it is unlikely that any significant changes will occur in the near future.
The HHS suggested that the DEA should consider downgrading marijuana from a Schedule I to a Schedule III drug classification. This recommendation comes at a challenging time as the U.S. is approaching another election year, making major policy changes improbable until after the election. Investors may need to wait until at least 2025 before seeing any significant progress in this area.
Despite the political challenges, a potential rescheduling of marijuana would greatly benefit cannabis stocks by increasing cash flow. The HHS has conducted research indicating medical benefits of cannabis and low potential for abuse, but politics will likely dictate the timeline for any policy changes.
While U.S. cannabis reform could lead to financial advantages for the industry worldwide, progress may only come under a Biden administration and after the upcoming election. However, incremental changes such as rescheduling could still positively impact cannabis stocks in the interim.
In the meantime, investors may consider looking at cannabis stocks that are already performing well, such as Organigram Holdings. With investments from companies like British American Tobacco and a focus on international expansion, Organigram is one of the few cannabis stocks showing profitability and responsible financial management. Despite some fluctuations in stock prices, Organigram’s strategic investments and cost-saving initiatives make it a strong contender for investors anticipating growth in the cannabis industry.
