The past week has been an exhilarating rollercoaster ride for cannabis stocks. The sector’s juggernauts have witnessed remarkable surges, catapulting into the green by noteworthy margins. This surge is partly attributed to Germany’s bold move to legalize cannabis nationwide, set to come into force on April 1.

While this development holds promise on a global scale, the scenario in the United States paints a less rosy picture for cultivators and sellers alike. Senator Mitt Romney and a cohort of Republican lawmakers are up in arms over the Biden administration’s agenda to reclassify cannabis as less risky, firing off a missive to the U.S. Drug Enforcement Administration (DEA) to voice their reservations.

For cannabis stocks, this could signal rough waters ahead. The long-awaited policy shift for these companies might face a snag. Nonetheless, this orchestrated move by the GOP does not guarantee compliance from the DEA.

Implications for Cannabis Stocks

Despite Senator Romney’s anti-cannabis rhetoric, several cannabis stocks are on an upswing today. Shares of U.S.-based cannabis titans like Curaleaf (OTCMKTS:CURLF), Trulieve Cannabis (OTCMKTS:TCNNF), and Green Thumb Industries (OTCMKTS:GTBIF) have all closed higher by 5% or more. Meanwhile, Canadian cannabis giants such as Tilray Brands (NASDAQ:TLRY) and Canopy Growth (NASDAQ:CGC) are faring even better.

Clearly, the market appears unperturbed by Senator Romney’s correspondence. Nevertheless, prudence is advised. Senator Romney, along with Ranking Member Jim Risch (R-ID) and Senator Pete Ricketts (R-NE), underscore their apprehensions regarding the planned reclassification in the letter:

“As members of the Senate Committee on Foreign Relations, we write to underscore the Drug Enforcement Administration’s (DEA) duty under the Controlled Substances Act (CSA) to ensure compliance with the United States’ treaty obligations under the Single Convention on Narcotic Drugs (Single Convention). Any effort to reschedule marijuana must be based on proven facts and scientific evidence—not the favored policy of a particular administration—and account for our treaty obligations.”

From my vantage point, this appears to be a blatant attempt by one political faction to impede the progress of another. However, in contrast to the insinuations in the letter, verifiable facts support the Biden administration’s stance. In January 2024, a review by the U.S. Food & Drug Administration (FDA) furnished ample evidence backing the reclassification of marijuana as a “less risky drug.”

Considering this, it is improbable that the missive will significantly influence the DEA’s course of action. Cannabis stocks seem poised to maintain their upward trajectory, at least in the near term.

As of the publication date, Samuel O’Brient did not hold any positions in the securities discussed. The opinions expressed are solely those of the author, adhering to the InvestorPlace.com Publishing Guidelines.