The U.N. Office on Drugs and Crime voted 27-25 to take cannabis off its most stringent category of controlled substances. The plant is still classified as a Schedule 1 substance under the 1961 Single Convention on Narcotic Drugs.
However the symbolic vote could encourage the U.S. to loosen federal laws on cannabis, especially medical and research, to coincide better with state laws, according to a Cowen research note Wednesday.
"Congress may be moving slower than the cannabis industry would like, but it is moving faster than almost any other policy issue," analyst Eric Assaraf said. "Not even the pandemic is derailing a House vote on the MORE Act scheduled for tomorrow, which would legalize cannabis."
Aurora Cannabis jumped 10.6% to $10.78 Wednesday afternoon while Canopy Growth (CGC) - Get Report gained 5.7%, Cronos Group (CRON) - Get Report climbed 4.6%, Tilray (TLRY) - Get Report gained 6% and Aphria (APHA) - Get Report rose 8.6%.
Overall, Cowen is bullish on the possibility of Congress legalizing cannabis eventually, "even though it won't happen soon," Assaraf said.
The U.N. vote follows a 2019 World Health Organization recommendation that "cannabis and cannabis resin should be scheduled at a level of control that will prevent harm caused by cannabis use and at the same time will not act as a barrier to access and to research and development of cannabis-related preparation for medical use.