Fact check: False claim that Pelosi bought cannabis stocks days before Biden marijuana announcement

Nate Trela, USA TODAY
·5 min read
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The claim: Nancy Pelosi bought stock in a cannabis company days before federal marijuana pardons

President Joe Biden said on Oct. 6 that he would pardon thousands of people with federal convictions for marijuana possession, a pledge made alongside a request for federal agencies to review how severely marijuana is treated under federal law. The revelation was a boon for publicly traded cannabis companies.

Viral social media posts also claimed it was a moneymaker for House Speaker Nancy Pelosi, D-Calif. The claims linked her to Canopy Growth, a company traded on the Toronto Stock Exchange under the ticker WEED, which saw its stock price soar the day of Biden's announcement.

“Nancy Pelosi bought 10,000,000 shares of $WEED stock 4 days before it exploded higher,” one Facebook user wrote in an Oct. 8 post. “Weed stocks skyrocketed on Thursday, and nancy (sic) Pelosi turned $80m investment into a $120m investment.”

The viral post questions the legality of such an investment, suggesting it was insider trading.

Another version of the claim was shared more than 200 times on Facebook before being deleted by the user. That iteration also included an image of a purported tweet claiming Reuters reported the investment and was shared more than 4,000 times by Monday.

But the claim is false.

There is no evidence Pelosi bought stock in a cannabis company days before Biden announced the federal marijuana possession pardons. Pelosi’s spokesperson said no such transaction happened. Such a purchase has not been reported by Reuters or any other reputable media outlet.

And the numbers in the post don't line up with where that stock traded before and after Biden's announcement.

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USA TODAY reached out to the Facebook user who shared the claim.

Pelosi's spokesperson, records undermine claim

A spokesperson for Pelosi directly refuted the claim.

“This is fake. No such transaction has been made,” Drew Hammill, Pelosi’s deputy chief of staff, wrote in an email.

The math presented in the post also doesn't add up.

The claim references a stock with the ticker symbol WEED. In the U.S. that ID is used by an exchange-traded fund that has only 175,000 shares, so it wouldn't be possible to buy 10 million shares as the claim asserts.

The figures in the post also make little sense if examined based on the Canadian company that uses the WEED ticker, Canopy Growth.

To make an $80 million investment for 10 million shares, Pelosi would have had to pay $8 Canadian dollars per share, which is about double the market price four days before the Oct. 6 announcement, the date in the claim. (Stock markets were not open that day, but pre-market and post-market trades usually fall near the previous market day's close and the next market day's open. WEED closed at $3.75 on Sept. 30 and opened at $3.79 on Oct. 3.)

To recoup $120 million, 10 million shares would have to be sold for $12 each. The high for Canopy Growth shares on the Toronto exchange on Oct. 6 was $5.26, and it closed at $5.16. That means Pelosi would have had to sell them for more than twice market price.

The claim makes even less sense if considered using U.S. dollars, as that would mean Pelosi both bought and sold the stock at roughly three times the market price.

Purchases of stocks must be documented in periodic transaction reports that lawmakers file with the clerk of the House of Representatives. Online records do not show a report that could include a stock purchase on Oct. 2, although Pelosi would still have more than a month to file it.

Owning and trading stocks is legal for members of Congress, although some lawmakers in both parties have proposed a ban because of the potential to use non-public information to get an upper hand.

Biden’s pardons only apply to convictions on federal charges of simple marijuana possession, directly affecting about 6,500 people. In the announcement, Biden encouraged governors to follow suit with state convictions, which represent the vast majority of marijuana-related cases. He also directed the departments of Justice and Health and Human Services to review how cannabis is federally scheduled, a move that would create more business and research opportunities around it.

Our rating: False

Based on our research, we rate FALSE a claim that Pelosi bought millions of shares of stock in a cannabis company days before federal marijuana pardons. The speaker’s office says no such transaction happened, and there are no disclosures or other legitimate reports saying that she engaged in the claimed stock trades.

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This article originally appeared on USA TODAY: Fact check: No evidence Nancy Pelosi bought marijuana stocks