Canopy growth: The time has come in January

Despite a few furious weeks with triple-digit returns in the spring, Canopy Growth shares will end the year with a significant loss. The cannabis company’s stock market value shrank by around 45 percent. The start of 2025 is also likely to be rather weak, as the next important event does not begin until January 21st.

The DEA’s cannabis debt consolidation process will begin that day. This is expected to be completed on March 3rd. As a reminder, marijuana is currently federally classified as Schedule I and is therefore legally on the same level as hard drugs such as heroin or LSD. In the process, the DEA is supposed to assess whether cannabis can be reduced to Schedule III in the future. If there is a reform, it would mean tax relief for companies. On the other hand, doctors could prescribe cannabis as a medicine, which would then also be available in pharmacies.

In principle, the DEA is an independent law enforcement agency. But it reports to the Justice Department, so one would think that incumbent politics would have no influence on its decisions. Even though Donald Trump spoke out in favor of legalization in Florida in November, this is likely to have become less likely at the federal level under a Republican administration.

CANOPY GROWTH CORP. REGISTERED STOCKS
(WKN: A3E2FV)

Canopy Growth’s chart reflects the chances of rescheduling quite clearly. The stock hit a new all-time low just last week and continues to be under massive downward pressure. This will most likely continue into 2025. Only a surprising legalization in the USA at the federal level would breathe new life into the sector – and with it Canopy Growth.

Note on conflicts of interest
The author holds direct positions on the following financial instruments or related derivatives mentioned in the publication, which can benefit from the possible effects of a price development as a result of the publication: Canopy Growth.

THE SHAREHOLDER 52/24 + 01/25