Investors in the cannabis industry experienced a pleasant surprise this week, as cannabis stocks began to rise for the first time since September of the previous year. This uptick in the market was spurred by comments made by Vice President Kamala Harris regarding the rescheduling of cannabis from a Schedule I substance.
While this news has sparked optimism among investors, many are now questioning whether this announcement is enough to sustain a continued bull run. It is important for investors to carefully consider the implications of this development.
The increase in cannabis stocks came as Harris revealed that the DEA is actively working to expedite the process of rescheduling marijuana. This announcement follows a previous confirmation by the DEA in January that a review of the substance was underway, with President Joe Biden indicating the urgency of the matter in recent statements.
Additionally, the evolving landscape of cannabis regulation in the United States, with up to 40 states now allowing for the use of marijuana, suggests a potential path towards federal legalization. While some states still only permit medical marijuana use, the broader acceptance of its medicinal benefits marks significant progress.
Furthermore, recent pardons issued by President Biden between October 2022 and December 2023 have also played a role in shifting the conversation around cannabis. While rescheduling marijuana would not equate to full legalization, it would pave the way for safer and more regulated usage, with the ultimate goal of classifying it as a Schedule 3 drug.
In terms of investment opportunities, it may be prudent to take a global perspective given the uncertainty surrounding federal election outcomes and potential policy changes. The Global X Cannabis ETF is one option for investors looking to capitalize on the growth of the industry. This ETF invests in companies involved in cannabis production, manufacturing, and distribution, with a geographically diversified portfolio including North America, Europe, and Australia.
While investing in cannabis stocks can offer significant potential returns, it is important to acknowledge the inherent risks involved. Before making any investment decisions, investors should carefully assess their own financial goals and risk tolerance to ensure alignment with their overall investment strategy.
