US cannabis stocks soar 20% after Trump endorses CBD’s benefits for seniors
News Summary
US cannabis stocks experienced a significant surge, with leading companies like Canopy Growth and Tilray Brands jumping approximately 20% in premarket trading. This rally followed President Donald Trump's social media post over the weekend, where he praised cannabidiol (CBD) for its potential to "revolutionize senior healthcare" by offering a natural approach to managing age-related health issues and reducing disease progression. The Trump administration had indicated in early August it was considering a reclassification of marijuana, which could lead to reduced criminal penalties associated with its use and open doors for further medical research. Such a reclassification would also eliminate the tax burden imposed by Section 280E, which currently prevents cannabis companies from claiming standard business deductions. Analysts noted that President Trump's surprise support for CBD's potential benefits significantly boosted this beleaguered listed sector.
Background
In the United States, cannabis has long been classified by the federal government as a Schedule I controlled substance under the Controlled Substances Act, alongside drugs like heroin, implying a high potential for abuse and no accepted medical use. This classification has historically restricted research, hindered state-level legalization efforts, and led to harsh criminal penalties. Furthermore, federal law Section 280E imposes a unique tax burden on cannabis businesses, disallowing them from claiming standard business deductions typically available to other industries, due to their involvement in what is federally considered illicit drug trafficking. This results in extremely high effective tax rates for cannabis companies, severely impacting their profitability and ability to attract traditional capital market investment. President Trump's 2025 statements signal a potential significant shift in these long-standing federal policies.
In-Depth AI Insights
What are the strategic motivations behind the Trump administration's push for cannabis policy reform? - Political Capital and Voter Base: In 2025, President Trump may be looking to broaden his support beyond core Republican voters. The widespread appeal of cannabis legalization and medical cannabis (especially CBD) cuts across party lines, particularly popular among younger demographics and seniors seeking alternative health solutions. Championing such reforms could be seen as an effective way to win over new support groups and solidify his