Canopy Growth applauded President Joe Biden’s announcement Thursday that he will pardon thousands of people convicted of marijuana possession.
The president also called for a review of how marijuana is classifed under federal law, saying the current status “makes no sense.”
Shares of Canopy jumped 22% after the news Thursday, closing at $3.75. Shares of fellow cannabis firm Tilray Brands gained over 30%. Both stocks also jumped in premarket trading Friday.
“Today represents action from the Administration that we have been waiting for – an acknowledgement that cannabis prohibition has failed and that too many lives have been significantly impacted as a result,” David Culver, vice president of government relations Canopy, said in a statement.
“President Biden, in keeping with his campaign commitments, has set into motion the actions needed to heal the harms of the past and chart a course for responsible, legal cannabis markets in the future,” Culver said.
Tilray couldn’t be reached for comment by CNBC.
Canopy Growth operations in Smiths Falls, Ontario.
Tom Franck | CNBC
Biden’s move could be a step toward a broad loosening of the federal classification of the drug. More than 6,500 individuals with prior convictions for simple marijuana possession were impacted by the pardons, according to the White House. This includes thousands more through pardons under D.C. law.
“There are thousands of people who have prior federal convictions for marijuana possession, who may be denied employment, housing, or educational opportunities as a result. My action will help relieve the collateral consequences arising from these convictions,” Biden said in a statement announcing the pardons.
Biden urged governors to issue similar pardons for cases regarding state offenses of civil possession of marijuana.
In an earnings report Thursday morning, Constellation Brands, which owns 36% of Canopy’s outstanding shares, said it took a $1 billion writedown related to its stake in the cannabis company.
Canopy’s stock has fallen more than 70% in the last 12 months amid slowing sales across the cannabis industry. The stock is more than 90% off its all-time high of $56.89.
–CNBC’s Christina Wilkie contributed to this report.