Cannabis ETFs Soar as Trump Mulls Over Marijuana Reclassification

Core Viewpoint - Cannabis stocks and ETFs experienced significant gains following reports that U.S. President Donald Trump is considering reclassifying marijuana to a less restrictive category, which could have major implications for the industry [1][2]. Industry Impact - The potential reclassification would move marijuana from Schedule I to Schedule III, allowing cannabis companies to claim standard business tax deductions and credits, expand access to banking, and facilitate more medical research [2][6]. - A Schedule III classification could ease banking restrictions, providing businesses with better access to banking services and attracting more investors [6]. - The reclassification could shift public perception, further legitimizing the medical cannabis industry and paving the way for broader acceptance and use of marijuana as a therapeutic agent [6][7]. - Nearly 40 states in the U.S. have already legalized marijuana in various capacities, and a federal shift could encourage more states to consider legalization [7]. Market Reaction - Following the news, cannabis stocks saw substantial increases: Trulieve Cannabis Corp. surged 35%, Tilray jumped 32%, Curaleaf Holdings climbed 29%, and Canopy Growth gained 24% [3]. - In the ETF market, Roundhill Cannabis ETF rose 29.4%, Amplify Seymour Cannabis ETF increased by 27.8%, and Amplify Alternative Harvest ETF gained 27.0% [4]. ETF Details - Roundhill Cannabis ETF (WEED): Concentrated exposure to leading U.S. cannabis companies, with an asset base of $6.4 million and an average daily trading volume of 42,000 shares [9]. - Amplify Seymour Cannabis ETF (CNBS): Actively managed fund with diversified U.S. exposure, holding 32 securities and an asset base of $76.2 million, trading an average of 11,000 shares daily [10]. - Amplify Alternative Harvest ETF (MJ): First ETF focusing on the global cannabis industry, with an asset base of $128.5 million and an average daily volume of 54,000 shares [12]. - AdvisorShares Pure US Cannabis ETF (MSOS): Actively managed ETF focusing on U.S. companies, with an asset base of $521 million and an average daily volume of $9.4 million shares [13]. - AdvisorShares Pure Cannabis ETF (YOLO): Actively managed fund with a focus on both domestic and foreign cannabis equity securities, holding 22 stocks with an asset base of $31.3 million and an average daily volume of 55,000 shares [14].