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Cannabis uptrend: DEA reclassification sends positive signals!
The new regulation of cannabis in the USA is causing a price rally in the sector! Find out which companies benefit and how the market situation is changing. Find out more now!
Cannabis uptrend: DEA reclassification sends positive signals!
Recent reports from The Associated Press about a potential reclassification of cannabis by the Drug Enforcement Administration (DEA) have caused a huge surge in cannabis stocks. The proposal to reclassify cannabis from being classified as a dangerous Category 1 drug to the less dangerous Category 3 has far-reaching implications for the industry. This reclassification could significantly reduce the tax burden on companies in the cannabis sector by repealing the infamous Section 280E, which has previously resulted in high tax payments.
The impact of reclassification and the potential recognition of the medical use of cannabis could lead to increased investor interest in cannabis companies. In response to this DEA news, companies in the Multi-State Operators (MSO) sector experienced huge share price gains. Most companies recorded price jumps between 15 and 30% with high trading volumes.
Another significant outcome of a potential reclassification would be to facilitate the placement of cannabis companies on leading U.S. stock exchanges. This increased access to capital markets could further strengthen the industry and provide companies with more growth opportunities. Experts estimate that in 2023 alone, cannabis companies paid about $2.1 billion in excessive taxes.
The positive impact of reclassification on the cannabis industry has investors optimistic, with leading funds such as the GF Global Cannabis Opportunity Fund betting on the most attractive MSO names. This strategic investment in companies in the cannabis and psychedelics sector could benefit from global megatrends and offers investors the opportunity to build diversified portfolios of promising stocks. With a clear focus on companies that could benefit from reclassification, the GF Global Cannabis Opportunity Fund remains optimistic and expects positive developments in the industry.