Canopy Growth (CGC) Stock Soars On Reports Of Federal Rescheduling

Canopy Growth Corp (NASDAQ:CGC) shares are skyrocketing Friday morning, driven by reports that President Donald Trump intends to relax federal marijuana regulations.

• Canopy Growth stock is surging to new heights today. Why are CGC shares rallying?

What To Know: The surge follows a Washington Post report stating that Trump is set to instruct federal agencies to reclassify marijuana as a Schedule III drug.

The specific financial driver fueling CGC's rise is the implication of this reclassification on corporate taxation and capital flow. Currently classified alongside heroin, cannabis companies face debilitating tax burdens.

Moving marijuana to Schedule III, a category reserved for drugs with medical uses like steroids or Tylenol with codeine, would subject Canopy Growth to different tax regulations. Investors are betting that this updated tax treatment will significantly improve the company’s bottom line by removing current fiscal handicaps.

Furthermore, this regulatory shift could attract more investments into the sector, providing Canopy with easier access to capital. Axios has reported that this change is expected to take place early next year, giving the market a tangible timeline for this relief.

While the rally is sector-wide, with peers like Tilray and Aurora also surging, CGC investors are specifically pricing in the benefits of a normalized operating environment where cannabis is treated as a legitimate pharmaceutical product rather than a dangerous illicit substance.

Benzinga Edge Rankings: Benzinga Edge rankings reflect the stock’s current profile with a Momentum score of 7.34 and a Growth score of 19.25, alongside positive price trends across short, medium and long-term horizons.

CGC Price Action: Canopy Growth shares were up 37.2% at $1.55 at the time of publication on Friday, according to Benzinga Pro data.

The stock is currently trading approximately 13.2% above its 50-day moving average of $1.23, suggesting that the recent price surge has positioned Canopy Growth favorably in the short term.

Additionally, it is trading about 9.7% above its 200-day moving average of $1.27, indicating that the stock is also performing well relative to its longer-term trend.

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