U.S. President Donald Trump has signed an executive order that reclassifies cannabis and eases restrictions on the recreational drug.
Trump’s order moves cannabis out of Schedule I classification, which is the most restrictive category and reserved for deadly narcotics such as heroin.
Going forward, cannabis will be a Schedule III drug, which is a category for substances with lower potential for abuse such as Tylenol with codeine.
However, Trump stopped short of legalizing cannabis at the federal level in America and said he does not endorse the use of the drug.
Critics said that Trump’s executive order, while a step in the right direction, doesn’t go far enough and is a disappointment.
Shares of leading Canadian cannabis stocks such as Tilray Brands (TLRY) and Canopy Growth (CGC) fell 4% or more as a result.
Reclassification in the U.S. is viewed by many analysts as a financial lifeline for the cannabis industry. The move enables companies to get bank loans and operate more freely in America.
Many on Wall Street expect the changes to draw major pharmaceutical players into the sector to chase federally insured revenue.
Industry experts say that reclassification could also pave the way for more research into the effects of cannabis use.
