(Reuters) -Shares of pot companies advanced in early premarket trading on Monday following a social media post by U.S. President Donald Trump over the weekend that suggested potential health benefits from the use of cannabidiol.
Trump’s post on Sunday said cannabidiol (CBD) could “revolutionize senior healthcare” by helping reduce disease progression and was shown as an alternative to prescription drugs.
In early August, Trump had said his administration was looking to reclassify the drug, which could also result in potentially easing criminal penalties around the use of marijuana.
U.S.-listed shares of Canopy Growth and Tilray Brands jumped about 20% each premarket, while Cronos Group and Aurora Cannabis also added 13.3% each.
The AdvisorShares Pure U.S. Cannabis exchange-traded fund surged 20.6% and is on track for its biggest quarterly gain on record of around 70%.
“MSOS, the largest U.S. marijuana-focused ETF, is indicated up 20% at the open and benefiting from President Trump’s surprise Sunday support for the potential benefits of CBD, with any support going a long way for this beleaguered listed sector,” said Ben Laidler, head of equity strategy at Bradesco BBI.
Reclassification of the drug would also remove the tax burden under Section 280E, which denies standard business deductions to cannabis companies. If the tax barrier is resolved, it could pave the way for cannabis companies to list on U.S. stock exchanges, further unlocking capital–market access.
(Reporting by Johann M Cherian and Pranav Kashyap in Bengaluru; Editing by Krishna Chandra Eluri)
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