Pot Grower Canopy’s Stock Skyrockets Over 81%

Shares of Canada-based Canopy Growth soared over 81% Monday, closing at $1.69. This is the first time that the Ontario cannabis company's stock has surpassed the $1 mark since it closed at $1.05 on May 24.

Canopy Growth stock has tripled in the two weeks since federal health officials asked the Drug Enforcement Agency to ease how it classifies marijuana.

On Aug. 29 the U.S. Department of Health and Human Services asked the DEA to reclassify pot as a Schedule III drug under the Controlled Substance Act. Marijuana is currently classified as a Schedule I drug, on a par with heroin.

If cannabis was to be reclassified as a Schedule III drug it would be treated as a medication with “a moderate to low potential for physical and psychological dependence,” according to the DEA. 

The main difference for cannabis companies would be that they would no longer be banned from writing off business expenses. U.S. Code Section 280E prohibits businesses involved in the trafficking of Schedule I and II drugs from taking tax deductions and credits.

"Canopy Growth is the most likely to benefit because of its options for the U.S. assets it seeks to consolidate under Canopy USA," wrote Morningstar strategist Kristoffer Inton on Aug.31.

Other cannabis companies also saw gains Monday. Edmonton, Canada-based Aurora Cannabis shares jumped 72%, and New York-based Tilray Brands saw a nearly 10% bump.