It was a rough day for Canadian cannabis stocks.
Canopy Growth Corp. shares tumbled 13.87 percent to $32.35. They were trading as high as $43.47 mid-morning on Tuesday (January 9).
Meanwhile, Aurora Cannabis shares fell 15.69 percent to $10.32; Aphria Inc. was off 12.31 percent to $18.02; and the Horizons Marijuana Life Sciences Index ETF was down 9.75 percent to $19.90.
Things could become even murkier for investors in Canadian cannabis stocks following the Trump administration's recent decision to rescind the Cole Memorandum.
Today after markets closed, Canadian securities regulators issued a statement saying they're "considering whether our disclosure-based approach for issuers with U.S. marijuana-related activities remains appropriate in light of the recission [sic] of the Cole Memorandum".
This disclosure-based approach was outlined in a notice on October 16, 2017.
It reflected the U.S. government's former "forbearance approach" to enforcing federal laws relating to cannabis, which was articulated in the Cole Memorandum.
The reappraisal of the regulatory approach won't make a difference to Canadian cannabis enterprises that have no operations south of the border. But it could affect a company like Vancouver-based Future Farm Technologies, which has announced plans to expand its operations in Maine and Florida.
Named after a U.S. deputy attorney general in the Obama administration, the Cole Memorandum is a set of guidelines to federal prosecutors about how to deal with marijuana offences in states that have legalized the plant.
It called for a largely hands-off approach.
Trump's attorney general, Jeff Sessions, said that his decision to revoke it will enable federal prosecutors “to use previously established prosecutorial principles that provide them all the necessary tools to disrupt criminal organizations, tackle the growing drug crisis, and thwart violent crime across our country".
Some see it as a way for Trump to ramp up the war on drugs, including cannabis, shortly after the most populous state, California, legalized marijuana on January 1.
And it's put the Trump administration in conflict with 10 U.S. big-city mayors, who wrote a letter to Sessions on January 10 criticizing this move as "a misguided legal overreach".