Pot stocks soar as U.S. House committee clears bill on federal weed legalization

Reuters

(Reuters) – Shares of marijuana companies rose on Thursday after a U.S. congressional committee passed a legislation to decriminalize cannabis, taking it a step closer to being approved by the Democratic-controlled House of Representatives.

The bill, which was passed 24 to 10 in the House Judiciary Committee on Wednesday, sent shares of Canopy Growth (WEED.TO), Aurora Cannabis (ACB.TO), Aphria Inc (APHA.TO) and Tilray Inc (TLRY.O) up between 8% and 15%. 

“We think federal legalization would be a big positive for investor sentiment surrounding cannabis equities, which have been battered by oversupply and a steep price decline for the underlying commodity since becoming legal in Canada,” said Garrett Nelson, senior equity analyst at CFRA Research.

The approval comes two months after the House passed a bill to advance legislation that would allow banks to provide services to cannabis companies in states where it is legal.

The latest bill, which has more than 50 co-sponsors, enables states to set their own policies while allowing to expunge federal marijuana convictions and arrests.

Additionally, the bill will authorize a 5% federal sales tax on marijuana products that are manufactured in or imported into the United States.

However, analysts were skeptical about the future of the bill.

“It’s such an early step in a long process that there are no near-term implications for cannabis stocks. The Senate isn’t likely to approve it, even if the House were to do so,” said Alan Brochstein, managing partner at New Cannabis Ventures.

Shares in the sector are down more than 25% this year, according to the alternative harvest ETF (MJ.P), which tracks cannabis-related stocks, taking a blow from a slow roll out of retail stores and oversupply in Canada, as well as uncertainties related to U.S. regulations.

Weed companies have been spending heavily to expand and strike partnerships in the United States, banking on more states legalizing cannabis for both recreational and medical use.

Currently, 11 U.S. states have legalized marijuana for recreational use, while 33 states have approved it for medical purposes.

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6 Responses to Pot stocks soar as U.S. House committee clears bill on federal weed legalization

  1. KOYOTE says:

    POT STOCKS? I GUESS AMERICANS HAVE GIVEN CEEDE ALL THE WEED ALONG WITH EVERYTHING ELSE EH??????

  2. somethinghappeninghere says:

    Yep, as long as you don’t grow your own, and buy from a company likely creating GMO “weed” it’s “legal”…

    Only reason marijuana was ever made illegal was to pay off the liquor industry when they finally ended that nonsense known as “prohibition”….when idiot “Christian morality legislators” cut the nonsense, let me know. I wonder if “Carrie Nation” realizes she “carried” the nation into some of the worst corruption known in the US in the 20th century…Al Capone, deadly moonshine, etc. etc.

    Memo to dumba$$ “Christians”–you cannot legislate morality!

    • KOYOTE says:

      THERE YA GO!!!!!
      CONDEMN A WHOLE RELIGION WITH SELF RIGHTEOUS BULLSHIT AND DIATRIBE… THATS SURE TO “WIN HEARTS AND MINDS”……………

    • # 1 NWO Hatr says:

      “Only reason marijuana was ever made illegal was to pay off the liquor industry when they finally ended that nonsense known as “prohibition”….”

      Dead wrong.

      Cannabis wasn’t the target, hemp was. When DuPont created nylon, they knew it couldn’t compete with hemp, so they lobbied the so-called ‘government’ to make hemp illegal.

      Unfortunately, the so-called ‘government’ did not discriminate… it lumped cannabis in with hemp.

      Then they discovered they could actually get away with putting someone in a cage for smoking a plant, and, voila… we have FULL PRISONS BEING RUN FOR PROFIT.

    • # 1 NWO Hatr says:

      Memo to dumba$$ posters (Christian or otherwise) IT’S THE ELITES TRYING TO LEGISLATE MORALITY… NOT TRUE CHRISTIANS.

      Any claiming to be Christian, and doing so are liars.

  3. somethinghappeninghere says:

    And another thing…are they gonna make this by “vaping”? Bwahahahahahahahahahahah

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