2023-09-18 02:08:14 PM ET (MT Newswires)
02:08 PM EDT, 09/18/2023 (MT Newswires) -- Piper Sandler continues to believe the US opportunity for cannnabis operators is significant and that existing US operators are best positioned. Their head start in the US will remain a competitive advantage, writes analyst Michael Lavery.
The HHS recommendation to the DEA to reschedule cannabis from Schedule I to Schedule III has driven a rally in the group, including Canadian LPs who have no direct benefit. If the DEA puts cannabis under Schedule III, then it would be determined to have an accepted medical use in treatment. A company could then (and would need to) submit a New Drug Application to the FDA for approval of any cannabis-based drug. And a patient would need a prescription to get the drug. It would not change the federal legal status of current US cannabis operators that currently operate outside this process.
But the stocks may all have another leg higher to run, potentially in the next couple of weeks, as any positive momentum on the SAFE Banking Act likely is a catalyst, Lavery adds. SAFE still faces hurdles in the Senate and House, but looks likely to get out of committee to the Senate floor. "While passage in the House is not a given, even with if it clears the Senate, we believe any hurdles it clears could be positive catalysts for cannabis stocks."