Regulatory relief arrives, but cannabis stocks sink on the news

The DOJ’s move to reclassify marijuana as a less dangerous drug could unlock normal business deductions for medical cannabis and speed up a path for recreational cannabis, but investors punished the news with a sharp sell-off in pot stocks (MSOS down about 17%, with Canopy Growth, Tilray and SNDL also weaker). The rule immediately benefits medical-cannabis firms, while recreational operators face an expedited hearing process later this year and ongoing hurdles like banking access and capital constraints. Retroactive tax relief for medical providers is suggested, but many questions remain about licensing, cross-licensing, international treaty workarounds, and the full implementation timeline.