One of the strangest conditions for cannabis stocks these days comes from the fact that cannabis is legal in several states but, somehow, illegal in the United States. That may be about to change, however, and cannabis stocks are widely on the rise as a result. Curaleaf Holdings (OTHEROTC:CURLF) gained just over 3%, while both Acreage Holdings (OTHEROTC:ACRHF) and Trulieve Cannabis (OTHEROTC:TCNNF) gained better than 8%. In addition, Tilray (NASDAQ:TLRY) added nearly 11% in the session.
What sent all these stocks surging upward? The chances that the United States marijuana market was about to open up to the fullest. The Department of Health and Human Services (HHS), backed up by 12 different attorneys general from as many states, is moving on the Drug Enforcement Agency (DEA) to reclassify marijuana into something less dangerous and, therefore, less regulated. Late last week, the HHS sent a letter to the DEA, advising a change in schedule from Schedule I to Schedule III.
Thanks to the set of health benefits that marijuana can bring—remember that medicinal marijuana was the first to be permitted in states—that would make it worth putting it on par with a drug like Tylenol. Currently, as a Schedule I, the DEA makes no distinction between marijuana and heroin, declaring that neither has valid health functions and “a high potential for abuse.”
A Major Win is Potentially Afoot
If the schedule change goes through, major benefits may potentially open up. For instance, there’s a significant potential upswing in cash flow, as well as overall creditworthiness. More cannabis operations will be able to access the banking system, a point that Congress has actually tried to broach on several occasions. Rapid expansions, more ready access to debt and the stock market, and more are all on tap should the pot stocks go fully legit.
Which Cannabis Stock is the Better Buy?
Turning to Wall Street, CURLF stock is the laggard in the field, as this Moderate Buy-rated stock offers an average price target of $4.60 per share but represents a 5.93% downside risk. Meanwhile, TCNNF stock is the leader, as this Strong Buy offers investors a 75.59% upside potential against an average price target of $11.87.
