This article first appeared on GuruFocus .
Cannabis stocks pulled back Thursday after President Donald Trump signed an executive order to reclassify marijuana under U.S. federal law.
The order directs federal agencies to shift cannabis from Schedule I to Schedule III of the Controlled Substances Act. The move falls short of nationwide legalization but could lower taxes and ease compliance burdens for licensed operators.
Shares of several U.S. multi-state operators dropped by double digits, retreating after a strong run-up earlier in the week. AdvisorShares Pure US Cannabis ETF ( MSOS ) slid about 12%, signaling broad pressure across U.S.-focused names.
Traders appeared to lock in gains following the rally into the decision. Some analysts said the pullback likely reflects uncertainty around how quickly agencies implement the change and how much relief companies ultimately receive.
Canadian cannabis producers were steadier, as the order does not directly change Canada's regulatory landscape.
The directive was signed by Trump in the presence of top officials in the health sector at the White House. He was selling it as an attempt to access the medical services in a more effective way, yet additional regulations have yet to be established.
