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Shares of cannabis companies leapt on Monday after Donald Trump drew attention to the potential benefits that use of hemp-derived cannabidiol (CBD) could bring to senior healthcare.
The US president used his Truth Social account on Sunday to share a video from the Commonwealth Project, an advocacy group for the integration of medical cannabis into mainstream healthcare for over-65s, several weeks after saying his administration was reviewing the possibility of reclassifying marijuana as a less dangerous drug.
Shares in Tilray Brands, a medical cannabis company that also owns several craft breweries, closed up by almost 61 per cent in New York at a 13-month high and a market capitalisation of more than $2bn. Cannabis-focused Canopy Growth jumped almost 17 per cent and peer Cronos Group gained about 13 per cent.
Trump did not comment on the video, which outlined potential benefits the use of CBD could have for seniors, including reduced pain and stress, improved sleep and the slowing of disease progression. CBD differs from tetrahydrocannabinol (THC), the other main compound found in cannabis, which is responsible for giving users a “high”.
The video said it was time to educate doctors on the body’s endocannabinoid system, which regulates things such as mood and sleep, and “provide Medicare coverage for CBD”.
The video’s call for coverage under Medicare, the federal health insurance programme for people in the US aged 65 and older, comes as the White House and some senior lawmakers contemplate policy changes that could shake up the CBD market.
In August, Trump said his government was reviewing the possibility of reclassifying marijuana at the federal level, a move that would follow on from ex-president Joe Biden’s efforts to shift cannabis from a so-called schedule I drug to schedule III. About 40 states allow medical marijuana use.
The reclassification of the drug would allow cannabis companies to take advantage of standard business tax deductions from which they are barred at present.
Trump’s remarks — and the reposted Commonwealth Project video — have given the sector some hope after uncertainty about the regulatory environment knocked share prices over the past year.
Mitch McConnell, the Republican senator from Kentucky, who championed the federal legalisation of hemp via the 2018 farm bill during the first Trump administration, had this year sought to roll back that legislation by banning hemp derivatives with a quantifiable amount of THC, the primary psychoactive ingredient found in cannabis.
A bill in California banning the sale of intoxicating hemp products outside authorised dispensaries is awaiting the signature of Democratic governor Gavin Newsom.
The difficulty of producing CBD products without at least some level of THC means a ban on cannabis with any trace amount of the compound could have adverse implications for US hemp growers.