It was an exciting week in the cannabis sector. Rumors that President Trump was planning to reclassify marijuana from Schedule I to Schedule III under the Controlled Substances Act (CSA) had pot stock shares soaring.
The stock of global cannabis company Tilray Brands (TLRY 3.74%) was up 28% at its high this week. However, even after the president did, in fact, sign an executive order, Tilray shares lost all of that gain. As of midday on Friday, Tilray stock was actually down 7.4% for the week, according to data provided by S&P Global Market Intelligence.
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Long path to legalization
The executive order mainly focused on improving access to medical marijuana and cannabidiol (CBD) products for conditions like pain, anorexia, and the side effects induced by chemotherapy. Medical marijuana access will help expand Tilray's business, but not as much as loosening regulations on recreational marijuana would have.
Tilray immediately issued a press release saying that it will accelerate the advancement of its U.S. medical cannabis operations. CEO Irwin Simon put out this statement:
We support President Trump's decision to reschedule cannabis as a constructive and necessary evolution of U.S. federal policy. This action aligns regulation with a vast body of scientific and medical data supporting cannabis medical use and safety, economic progress, and a healthcare-focused framework, while creating a more credible foundation for medical cannabis research, clinical development, and regulatory clarity.
He also effectively called the order an incremental step toward legalization.
NASDAQ: TLRY
Key Data Points
That's the problem for investors. An incremental step won't move the needle for Tilray's business anytime soon. While the new policies will benefit Tilray and other cannabis companies, investors had hoped for a more significant boost to the business.
