Cannabis stocks have gained significant ground in the last two weeks on news that U.S. regulators might reclassify marijuana as a Schedule III drug, down from its more highly regulated Schedule I status. A potential rescheduling would still mean cannabis is a controlled substance, but it would allow licensed producers much more latitude to expand into other markets, conduct research, access traditional sources of funding, and benefit from more favorable tax structures - ultimately fueling the industry's growth.
Since the rescheduling news broke in late August, shares of Canopy Growth (CGC) have nearly tripled, valuing the Canadian cannabis stock at a market cap of $988 million. Despite the recent uptick in share price, CGC is still down 98% from its all-time highs, having erased significant investor wealth in the last five years.
