The U.S. Department of Health and Human Services is recommending to the U.S. Drug Enforcement Administration that cannabis should be reclassified as a Schedule III controlled substance under U.S. law from Schedule I now, according to a report by Bloomberg. Cannabis stocks are rallying, with the AdviserShares Pure US Cannabis ETF MSOS up by nearly 33%, and the ETFMG Alternative Harvest ETF MJ up by 19.5%. Among individual stocks, Canopy Growth Corp. CGC was up by 18.5%, Curaleaf Holdings CURLF is up by about 17% and Tilray Brands Inc. TLRY was up by 17.5%. Cresco Labs CRLBF is rallying by 30.3%, Green Thumb Industries Inc. GTBIF was up by 19.7% and Trulieve Cannabis TCNNF was up by 17.9%. Spokespeople for Health and Human Services and the DEA did not immediately reply to emails from MarketWatch. In October, 2022, President Joe Biden asked Attorney General Eric Garland and Health and Human Services Secretary Xavier Becerra to start the process of reviewing how marijuana is scheduled under federal law. In a letter to the DEA seen by Bloomberg, Assistant Secretary for Health Rachel Levine cited a Food and Drug Administration review of marijuana’s classification. Under federal law, Schedule I drugs such as heroin, LSD and marijuana are defined as having no medical benefits. Schedule III drugs include products containing less than 90 milligrams of codeine per dose, ketamine, anabolic steroids and testosterone, according to the DEA’s website.

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