Cannabis stocks are marching higher on reports that U.S. Medicare is considering covering CBD treatments for some patients, providing a potential new revenue stream for the struggling industry.
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Bloomberg News was first to report that the Centers for Medicare & Medicaid Services is planning an initiative that would make some U.S. Medicare patients eligible for reimbursement for treatments using cannabidiol, or CBD, the active ingredient in cannabis.
The report states that an early version of the Medicare plan focuses on seniors receiving cancer treatments or palliative care. Shares of leading cannabis companies are up as much as 4% on the news, including the following names:
- Tilray (TLRY)
- Curaleaf Holdings (CURLF)
- Innovative Industrial Properties (IIPR)
- Aurora Cannabis (ACB)
- Cronos Group (CRON)
- Canopy Growth (CGC)
Long Decline for Cannabis Names
Howard Kessler, a payments financier advocating for expanded cannabis access, has apparently met with Health and Human Services Secretary Robert F. Kennedy Jr. about the issue. Cannabis stocks last rallied in September of this year when U.S. President Donald Trump shared a video supporting Medicare coverage of some cannabis treatments to manage pain.
The latest rise in cannabis stocks is welcome after they endured a long, slow decline waiting for approval at the national level in America. Most cannabis names are now penny stocks, defined as any security that trades for less than $5 a share.
Is TLRY Stock a Buy?
The stock of Tilray has a consensus Moderate Buy rating among three Wall Street analysts. That rating is based on two Buy and one Sell recommendations issued in the last three months. The average TLRY price target of $1.95 implies 92.12% upside from current levels.
