Cannabis stocks went through the roof after President Trump posted bizarre video.
On Sunday night (28 September), President Trump shared a video on Truth Social from The Commonwealth Project, which is on a mission to make cannabidiol (CBD) accessible to senior citizens.
“Older adults are suffering needlessly,” said the narrator of the nearly three-minute video, produced by The Commonwealth Project. “Hemp-derived CBD can make them feel better, live longer and improve their quality of life significantly.”
The video explains the body's endocannabinoid system, which naturally processes cannabinoids and helps regulate functions such as sleep, mood, appetite, pain and immune responses.
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CBD is marketed as a solution to 'restore' the endocannabinoid system, helping seniors live longer and happier lives. The video also slams the pharmaceutical companies for pushing medications that don't work as well, showing a pill bottle sarcastically marked 'Probably Good For Blood Pressure.'
In response to the President's post and his apparent endorsement of the market, CBD company stocks surged in pre-market trading on Monday (29 September). In August, Trump's administration was looking to reclassify marijuana as a less dangerous drug in the 'next few weeks,' although no announcement followed.
Cannabis is listed as a Schedule 1 substance, which is illegal under the Controlled Substances Act (CSA), but many states choose to legalise or regulate it.
The drug is already legal in some form in almost 40 states. But reclassifying marijuana at the federal level could help bridge the gap between state and federal weed laws and ease the criminal penalties around its use.
US-listed shares of Canopy Growth and Tilray Brands both rocketed almost 20% before markets opened, while Cronos Group jumped 9.5% and Aurora Cannabis shot up 13.7%.
Meanwhile, The AdvisorShares Pure U.S. Cannabis ETF exploded 25.2% and is heading for its biggest quarterly surge ever at 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.
Former President Biden had told the Department of Health and Human Services to review marijuana's classification, and they recommended bumping it down to Schedule III - a category for drugs with moderate to low addiction potential.
While Trump's making moves to reclassify the substance, this doesn't mean it's legalising the drug, but it does reduce some of the burden on the companies,' said Daniela Hathorn, senior market analyst at Capital.com. "I do think there is further room for these stocks to move higher if it's confirmed that the reclassification is happening."