(Bloomberg) -- Marijuana stocks surged on Wednesday after the US Department of Health and Human Services sent a letter to the Drug Enforcement Agency urging them to loosen rules on cannabis. 

The BI Global Cannabis Competitive Peers Index surged as much as 7.5% after the announcement. Tilray Brands Inc. and Canopy Growth Corp. led gains, both advancing at least 19%. 

Rachel Levine, the assistant health and human secretary, recommended to the Drug Enforcement Agency that cannabis be classified as a Schedule III drug under the Controlled Substances Act, according to a letter viewed by Bloomberg News. 

After a burst of optimism following the election of Joe Biden as president in 2020, pot stocks have been mired in a slump amid delays to changes in cannabis’ status as an illegal drug. 

Last October, Biden rolled out initiatives focused on marijuana, including a pardon of all prior federal offenses of simple possession, while urging governors to do the same with state offenses. As a part of the effort, he asked the HHS secretary and the US Attorney General to initiate the administrative process to review how marijuana is scheduled under federal law.

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