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CTV News
12 minutes ago
- CTV News
How U.S. marijuana reclassification could help cannabis companies
Cannabis clones are displayed for customers at Home Grown Apothecary in Portland, Ore. (AP Photo/Jenny Kane) U.S. President Donald Trump's administration is looking to reclassify marijuana as a less dangerous drug, a shift that could ease criminal penalties and reshape the pot industry by lowering tax burdens and making it easier for firms to secure funding. Trump said on Monday a decision could come within the next couple of weeks. U.S.-listed cannabis-linked stocks rose in pre-market trading on Tuesday, led by a 13 per cent jump in Canopy Growth. Organigram Global, SNDL, Aurora Cannabis and Tilray Brands gained between three and 12 per cent. What does reclassifying entail? Under the Controlled Substances Act, marijuana is listed as a Schedule I substance, meaning it has a high potential for abuse and no current accepted medical use. Reclassifying marijuana as a less dangerous drug could unlock banking access for pot producers, attract institutional investors, reduce tax burden and spur mergers and acquisitions. Securing funding remains one of the biggest challenges for cannabis producers, as federal restrictions keep most banks and institutional investors out of the sector, forcing pot producers to turn to costly loans or alternative lenders. Last year, the Biden administration asked the Department of Health and Human Services to review marijuana's classification, and the agency recommended moving it to Schedule III, a category for substances with a moderate to low risk of physical or psychological dependence. What would be the tax implications? One of the biggest benefits from a reclassification would be that cannabis firms would no longer be subject to Section 280E of the U.S. federal tax code. That provision prevents businesses dealing in Schedule I and II controlled substances from claiming tax credits and deductions for business expenses. What comes next? TD Cowen analyst Jaret Seiberg said full legalization remains unlikely, citing a lack of meaningful support in Congress and limits on how far the Drug Enforcement Administration (DEA) can go through rescheduling alone. 'It seems more likely to us that Trump would revive the effort at the DEA to move cannabis to Schedule III, which would permit the government to regulate it,' said Seiberg. Some analysts, however, say a reclassification will not change much. Cannabis will remain federally illegal, interstate trade will not be allowed and the silo system of each state deciding their own market rules will still apply, according to equity research firm Zuanic & Associates. (Reporting by Mrinalika Roy and Arunima Kumar in Bengaluru; Editing by Saumyadeb Chakrabarty)
Global News
43 minutes ago
- Global News
U.S., China extend tariff deadline for 90 days just hours before expiration
U.S. President Donald Trump extended a trade truce with China for another 90 days Monday, at least delaying once again a dangerous showdown between the world's two biggest economies. Trump posted on his Truth Social platform that he signed the executive order for the extension, and that 'all other elements of the Agreement will remain the same.' Beijing at the same time also announced the extension of the tariff pause, according to the Ministry of Commerce. The previous deadline was set to expire at 12:01 a.m. Tuesday. Had that happened the U.S. could have ratcheted up taxes on Chinese imports from an already high 30 per cent, and Beijing could have responded by raising retaliatory levies on U.S. exports to China. The pause buys time for the two countries to work out some of their differences, perhaps clearing the way for a summit later this year between Trump and Chinese President Xi Jinping, and it has been welcomed by the U.S. companies doing business with China. Story continues below advertisement Sean Stein, president of the U.S.-China Business Council, said the extension is 'critical' to give the two governments time to negotiate a trade agreement that U.S. businesses hope would improve their market access in China and provide the certainty needed for companies to make medium- and long-term plans. 'Securing an agreement on fentanyl that leads to a reduction in U.S. tariffs and a rollback of China's retaliatory measures is acutely needed to restart U.S. agriculture and energy exports,' Stein said. China said Tuesday it would extend relief to American companies who were placed on an export control list and an unreliable entities list. After Trump initially announced tariffs in April, China restricted exports of dual-use goods to some American companies, while banning others from trading or investing in China. The Ministry of Commerce said it would stop those restrictions for some companies, while giving others another 90-day extension. Reaching a pact with China remains unfinished business for Trump, who has already upended the global trading system by slapping double-digit taxes – tariffs – on almost every country on earth. 3:20 Canada targets China with higher tariffs as part of steel industry measures The European Union, Japan and other trading partners agreed to lopsided trade deals with Trump, accepting once unthinkably U.S. high tariffs (15 per cent on Japanese and EU imports, for instance) to ward off something worse. Story continues below advertisement Trump's trade policies have turned the United States from one of the most open economies in the world into a protectionist fortress. The average U.S. tariff has gone from around 2.5 per cent at the start of the year to 18.6 per cent, highest since 1933, according to the Budget Lab at Yale University. Get breaking National news For news impacting Canada and around the world, sign up for breaking news alerts delivered directly to you when they happen. Sign up for breaking National newsletter Sign Up By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy But China tested the limits of a U.S. trade policy built around using tariffs as a cudgel to beat concessions out of trading partners. Beijing had a cudgel of its own: cutting off or slowing access to its rare earths minerals and magnets – used in everything from electric vehicles to jet engines. In June, the two countries reached an agreement to ease tensions. The United States said it would pull back export restrictions on computer chip technology and ethane, a feedstock in petrochemical production. And China agreed to make it easier for U.S. firms to get access to rare earths. 'The U.S. has realized it does not have the upper hand,'' said Claire Reade, senior counsel at Arnold & Porter and former assistant U.S. trade representative for China affairs. In May, the U.S. and China had averted an economic catastrophe by reducing massive tariffs they'd slapped on each other's products, which had reached as high as 145 per cent against China and 125 per cent against the U.S. 2:11 Business Matters: Global stock markets surge as U.S. and China reach 90-day 'breakthrough' trade truce Those triple-digit tariffs threatened to effectively end trade between the United States and China and caused a frightening sell-off in financial markets. In a May meeting in Geneva they agreed to back off and keep talking: America's tariffs went back down to a still-high 30 per cent and China's to 10 per cent. Story continues below advertisement Having demonstrated their ability to hurt each other, they've been talking ever since. 'By overestimating the ability of steep tariffs to induce economic concessions from China, the Trump administration has not only underscored the limits of unilateral U.S. leverage, but also given Beijing grounds for believing that it can indefinitely enjoy the upper hand in subsequent talks with Washington by threatening to curtail rare earth exports,' said Ali Wyne, a specialist in U.S.-China relations at the International Crisis Group. 'The administration's desire for a trade détente stems from the self-inflicted consequences of its earlier hubris.' It's unclear whether Washington and Beijing can reach a grand bargain over America's biggest grievances. Among these are lax Chinese protection of intellectual property rights and Beijing's subsidies and other industrial policies that, the Americans say, give Chinese firms an unfair advantage in world markets and have contributed to a massive U.S. trade deficit with China of $262 billion last year. Reade doesn't expect much beyond limited agreements such as the Chinese saying they will buy more American soybeans and promising to do more to stop the flow of chemicals used to make fentanyl and to allow the continued flow of rare-earth magnets. But the tougher issues will likely linger, and 'the trade war will continue grinding ahead for years into the future,'' said Jeff Moon, a former U.S. diplomat and trade official who now runs the China Moon Strategies consultancy. Story continues below advertisement —Associated Press Staff Writers Josh Boak and Huizhong Wu contributed to this story.
CTV News
an hour ago
- CTV News
Trump says Intel CEO has an ‘amazing story' days after calling for his resignation
Less than a week after demanding his resignation, President Donald Trump is now calling the career of Intel's CEO an 'amazing story.' Shares of Intel, which slid last week after CEO Lip-Bu Tan came under fire from the U.S. President, bounced higher before the opening bell Tuesday. The attack from Trump came after Sen. Tom Cotton sent a letter to Intel Chairman Frank Yeary expressing concern over Tan's investments and ties to semiconductor firms that are reportedly linked to the Chinese Communist Party and the People's Liberation Army. Cotton asked Intel if Tan had divested from the companies to eliminate any potential conflict of interest. Trump said on the Truth Social platform Thursday that, 'The CEO of Intel is highly CONFLICTED and must resign, immediately. There is no other solution to this problem. Thank you for your attention to this problem!' Tan was named Intel CEO in March and it is unclear if he has divested his interests in the chip companies. Tan said in a message to employees that there was misinformation circulating about his past roles at Walden International and Cadence Design Systems and said that he'd 'always operated within the highest legal and ethical standards.' After a Monday meeting with Tan at the White House, Trump backed off his demand that Tan resign without hesitation. 'I met with Mr. Lip-Bu Tan, of Intel, along with Secretary of Commerce, Howard Lutnick, and Secretary of the Treasury, Scott Bessent,' Trump wrote in a Truth Social post. 'The meeting was a very interesting one. His success and rise is an amazing story. Mr. Tan and my Cabinet members are going to spend time together, and bring suggestions to me during the next week. Thank you for your attention to this matter!' Shares of Intel rose gained more than three per cent in premarket trading. The economic and political rivalry between the U.S. and China are increasingly focused on computer chips, AI and other digital technologies that are expected to shape future economies and military conflicts. Michelle Chapman, The Associated Press
