In recent months, cannabis stocks have been among the hottest stocks. Currently, they are experiencing immense growth as new cannabis products are becoming “more and more legal” in the United States and different ways to use cannabis are being explored. In day-trading on Thursday, many cannabis stocks shot up once again as the US Drug Enforcement Administration (DEA) classified a cannabidiol-based drug made by GW Pharmaceuticals (GWPH) in its least restrictive category.
GW Pharmaceuticals is a UK-based company which is best known for its multiple sclerosis treatment product nabiximolsm, which was the first natural cannabis plant derivative to gain market approval in any country in the world. The new drug, Epidiolex, which is a cannabis-based treatment for epilepsy, is now categorized in the least restrictive category, known as Schedule V. Schedule V drugs are considered to have the lowest potential for abuse. For reference, other drugs like heroin, LSD, and marijuana remain in Schedule I.
According to Stifel analyst, Paul Mattela, the announcement provides a great ability for the cannabis industry and for this company to grow quickly. In a statement, Mattela said that this announcement “renders the launch set-up fairly straightforward for GW into a market where there are a significant unmet medical need and very high pent-up awareness/demand.” He went on to say, “we continue to recommend the stock on the basis that we believe the Epidiolex launch can exceed first-year expectations.”
As a result of the announcement, shares of GW Pharmaceuticals rose 7% in day-trading on Thursday to a nearly all-time high of $174.50 per share. Beyond GW, other cannabis base companies saw growth from the announcement. In particular, Canada-based cannabis company Tilray (TLRY) saw its stock rise 15% in day-trading and 3% more in after-hours trading. In the past two months alone, Tilray has seen its stock vault up more than 500% from a price of $25 per share to the current mark at $131.30.
A few of the other players in the cannabis industry in Canada did not fare as well in trading Thursday; however, both stocks have endured much volatility in price over the past few weeks. Aurora Cannabis (ABCFF) saw its shares drop more than 4 percent to below $9 in trading. However, the stock has seen shares jump from around $5 to as high as $10.28 in the past two months. Additionally, Canopy Growth Corporation (CGC) saw its share drop 5% in trading to $49.42. Like Aurora, it has also seen nearly 100% growth in the past two months.