Shares of GW Pharmaceuticals PLC surged to a record high Thursday, after the medical-marijuana company announced a new Drug Enforcement Administration stance on its approved drug containing cannabidiol, or CBD.
Specifically, the DEA said Thursday it now places FDA-approved drugs with CBD in â€śSchedule V,â€ť which it defines as having the lowest potential for abuse, such as drugs used to treat diarrhea and cough suppressants. Marijuana remains a â€śSchedule Iâ€ť drug, along with heroin and LSD.
GWâ€™s stock GWPH, +5.31% ran up 8.3% in afternoon trade, and was up as much 10% earlier in the session to an all-time intraday high of $179.65. Volume spiked to 1.9 million shares, or about four-times the full-day average.
The DEAâ€™s move comes three months after Epidiolex became the first and only cannabis-derived drug to be approved by the Food and Drug Administration. The DEA action means that GW can sell Epidiolex, a treatment for pediatric epilepsy, but did not go further to reclassify CBD as a whole.
Stifel Nicolaus analyst Paul Matteis said he had previously speculated that Epidiolex would be â€śSchedule IV,â€ť which includes prescription drugs such as Valium and Xanax.
â€śWe continue to recommend the stock on the basis that we believe the Epidiolex launch can exceed first-year expectations,â€ť Matteis wrote in a note to clients.
Elsewhere in the cannabis sector, the U.S.-listed shares of Aleafia Health Inc. ALEAF, -2.80% ALEF, -2.14% hiked up 13%, after the Toronto-based cannabis cultivation and medical clinics company said Thursday it has signed a new supply agreement with CannTrust Holdings Inc., in which CannTrust TRST, +1.26% Â has the right to buy up to 15,000 kilograms of cannabis from Aleafia. CannTrust shares fell 4.2%.
On Wednesday, Aleafiaâ€™s stock plummeted 22% to snap a seven-session win streak, in which it rocketed 158%.
Meanwhile, the broader cannabis sector was mostly weaker, as the ETFMG Alternative Life Sciences Index exchange-traded fund MJ, +2.77% shed 1.2%, with 23 of its 37 equity components trading lower. The ETF was still up 37% over the past three months, while the Russell 2000 index of small-capitalization stocks RUT, +1.78% has tacked on 3.3% and the Dow Jones Industrial Average DJIA, +0.42% has gained 9.9%.
The sectorâ€™s pullback comes after Ontario unveiled late Wednesday its set of rules that govern the retail portion of cannabis sales in Canada, ahead of full-legalization in the country on Oct. 17. Ontario is expected to be the biggest customer for recreational marijuana in Canada: It accounted for more than 40% of cannabis sales in the country last year, according to StatisticsCanada.
The biggest gainer in the ETF (MJ) was Tilray Inc.â€™s stock TLRY, +2.79% which shot up 12%, and has now rallied 29% amid a three-session win streak. Tilray received DEA approval to supply marijuana extracts for a clinical trial of a drug recently, an approval many U.S. companies have attempted to receive.
Among other more-active cannabis stocks, Aurora Cannabis Inc. US:ACBFF ACB, -0.43% fell 3.6%, Canopy Growth Corp. CGC, +2.37% WEED, +0.95% shed 5.5%, Cronos Group Inc. CRON, +5.26% CRON, +4.43% lost 2.1% and Supreme Cannabis Co. SPRWF, +5.53% FIRE, +5.10% declined 2.6%.
Shares of India Globalization Capital Inc. US:IGC jumped, adding to Wednesdayâ€™s 30% rally, after the company said it entered the CBD-infused energy drink business. The stock was on track for its highest close since April 2012.