Back to top
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Cronos Group Inc. (CRON) - free report >>
We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Cronos Group Inc. (CRON) - free report >>
Image: Bigstock
3 Cannabis Stocks Soaring on HHS' Recommendation to DEA
On Wednesday, the U.S. Department of Health and Human Services (“HHS”) sent its recommendations to the Drug Enforcement Administration (“DEA”) that marijuana be reclassified as a lower-risk drug. This development will boost the budding cannabis business, which has forever operated under the cloud of legality and perception. Despite being legalized for recreational use in many states, marijuana’s federal classification alongside drugs such as heroin and LSD has been a hindrance.
The industry has been in free fall since it witnessed a sales surge during the pandemic. Perceptions about the industry have ensured that it is mostly an unbanked business, and trade between states is not common. With a federal reclassification and gradual change in perception, this could change, and the marijuana market could open up.
Currently, marijuana is part of Schedule I of the Controlled Substances Act. This new recommendation aims to shift it to Schedule III, defined as drugs with a moderate to low potential for physical and psychological dependence. Only the DEA can reschedule marijuana, and it remains to be seen whether it acts on the recommendations.
Regardless, prices of cannabis stocks jumped on Thursday, reacting to this bit of news. Canopy Growth Corporation (CGC - Free Report) , one of the biggest players in the market, added more than a fourth of its value, skyrocketing 25.8%. CGC currently carries a Zacks Rank #3 (Hold). For the current year, its estimated earnings growth is 93.6%. For 2024, it is projected at 27.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Canopy’s peers like Tilray Brands, Inc. (TLRY - Free Report) and Cronos Group Inc. (CRON - Free Report) , also carrying a Zacks Rank #3, saw sharp movement upward, rising 11.3% and 9.6%, respectively. For the current year, the estimated earnings growth for Tilray and Cronos are 14.3% and 62.5%, respectively.
This reclassification, which is currently a recommendation only, is almost certain to kickstart a boom for marijuana. How and whether at all it transpires, investors will keenly monitor.