U.S. President Joe Biden and Vice President Kamala Harris attend a meeting at the White House
U.S. President Joe Biden listens to a guest doctor speak during a meeting of the Reproductive Healthcare Access Task Force in the State Dining Room at the White House in Washington, U.S., October 4, 2022.

President Joe Biden took steps to overhaul U.S. policy on marijuana on Thursday by pardoning thousands of people with federal offenses for simple marijuana possession and initiating a review of how the drug is classified.

Biden said thousands of people with prior federal convictions could be denied employment, housing or educational opportunities and his executive action would relieve such "collateral" consequences.

Biden's move fulfills a campaign promise and is likely to please members in his left-leaning political base ahead of the November midterm elections in which the president's fellow Democrats are defending control of the House of Representatives and Senate.

"Too many lives have been upended because of our failed approach to marijuana. It's time that we right these wrongs," Biden said.

He urged state governors to follow suit.

"Just as no one should be in a federal prison solely due to the possession of marijuana, no one should be in a local jail or state prison for that reason, either," Biden said.

Shares of cannabis growers and sellers surged following Biden's comments, with Tilray Brands and Canopy Growth both jumping more than 20%.

The results of a classification review could have wide ramifications. Presently the drug falls under the same classification as heroin and LSD and is in a higher classification than fentanyl and methamphetamine, the president said.

If marijuana classification were to ease at the federal level, that could allow major stock exchanges to list businesses that are in the cannabis trade, and potentially allow foreign companies to begin selling their products in the United States.

While many states have legalized the medical or recreational use of cannabis, the substance remains illegal under U.S. federal law, forcing most major banks to deny their services to cannabis-related businesses.

The issue has forced U.S. marijuana companies to trade their shares over the counter or by listing in Canada, with the Nasdaq and New York Stock Exchange prohibited from listing them.

The president's action drew praise from some members of Congress.

"The Progressive Caucus applauds this action by President Biden today to advance criminal and racial justice," said Representative Pramila Jayapal, who chairs a group of left-leaning lawmakers, in a statement.

Biden said he had directed Attorney General Merrick Garland to develop an "administrative process" to issue certificates of pardon to those who are eligible.

"The Justice Department will expeditiously administer the President's proclamation, which pardons individuals who engaged in simple possession of marijuana, restoring political, civil, and other rights to those convicted of that offense," the department said in a statement.

Biden said certain rules needed to stay in place even as regulations around the country loosened.

"Finally, even as federal and state regulation of marijuana changes, important limitations on trafficking, marketing, and under-age sales should stay in place," Biden said.