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Canopy Growth (NASDAQ:CGC) emerges as a standout winner amidst the growing clamor for federal marijuana policy revision. The latest numbers depict a dazzling ascent for CGC stock, showcasing over a 10% uptick on Wednesday. For the preceding five days, the shares have soared by a remarkable 40%.
Last week, Vice President Kamala Harris put forth a call for the U.S. Drug Enforcement Administration (DEA) to rethink its position on marijuana. In a White House congregation with individuals who availed marijuana pardons under President Joe Biden, Harris denounced the existing policy as “absurd” and urged the agency to reclassify cannabis under the Controlled Substances Act.
“I’m sure DEA is working as quickly as possible and will continue to do so, and we look forward to the product of their work,” Harris affirmed.
Reports indicate that the initiation date of the DEA’s cannabis rescheduling review remains nebulous. Nevertheless, the agency disclosed in January that such an appraisal was underway.
The Intersection of CGC Stock and Politics
Cannabis reform stands out as a seemingly straightforward issue for the Biden administration. November 2022 findings from the Pew Research Center reveal that a majority of U.S. adults advocate for the legalization of marijuana for both medicinal and recreational purposes. Recent data trends indicate a further surge in pro-legalization sentiment. It thus comes as no surprise that CGC stock is surging as a direct consequence.
Furthermore, President Biden likely harbors a political motive to spearhead marijuana rescheduling efforts. As per Politico, he aims to sway more young voters towards the Democratic camp in the impending elections through his strides in cannabis reform.
In a nationwide poll, Biden maintains a “narrow lead” over former President Donald Trump, with electoral outcomes hanging in the balance, largely contingent on Biden’s current approval ratings. A resounding victory is imperative for Biden, with marijuana reform offering a potential avenue for securement.
However, not all marijuana advocacy groups exhibit unreserved enthusiasm regarding rescheduling endeavors. Specific concerns revolve around the extent of rescheduling not adequately addressing disproportionate law enforcement and regulatory enforcement disparities. The contentious historical landscape of marijuana-focused legislation adds another layer of complexity to the picture that rescheduling might not entirely resolve.
Significance in the Surge
Despite CGC stock’s recent upswing, analysts retain a pessimistic outlook on Canopy Growth, bestowing a consensus moderate sell rating on its shares. TipRanks’ breakdown reveals three holds and two sells, marking a noteworthy absence of buy ratings on CGC stock dating back to August.
On the publication date, Josh Enomoto did not hold any positions related to the securities mentioned. The perspectives expressed herein are the author’s own and adhere to InvestorPlace.com Publishing Guidelines.
