Monday: Cannabis Capital Markets: Roundup

NEW YORK- Many cannabis investors are waiting for legalization in the United States to act as a catalyst. The stock market is volatile as progress toward that aim ebbs and flows, and investors keep an eye on how the Senate handles legalization.

Today was another tumultuous day in the sector, following a recent spike.

Many Canadian cannabis companies have risen in value over the last month as optimism grew that the United States would get closer to legalizing cannabis. However, several of these names have reversed course this week. Tilray (TLRY), Canopy Growth (CGC), and Aurora Cannabis (ACB) all saw their stocks fall by roughly 5% early Monday.

On April 1, 2022, the Marijuana Opportunity, Reinvestment, and Expungement (MORE) Act was enacted by the United States House of Representatives. That House vote basically agreed to legalize cannabis by eliminating it from the list of federally illegal narcotics under the Controlled Substances Act, largely along party lines.

As a result, the topic will be taken up by the Senate for further consideration. In recent weeks, cannabis companies have benefited from progress toward legalization in the United States, as well as some encouraging earnings news.

Tilray’s stock has increased by 23% since mid-March. Canopy Growth and Aurora have both seen their stock prices rise by roughly 9%. However, with the awareness that the MORE Act has a significant challenge in passing the Senate before becoming law, some cannabis investors are cashing in on the current rally.

The Hill, a political news website, recently highlighted the difficulties that Senate Majority Leader Charles Schumer will face in passing any cannabis reform legislation in the US Senate.

Positive earnings news drove some recent advances in cannabis stocks, independent of any US reform. Even though the actual reform will take years from now.

Tilray has been acquiring and investing in the United States to expand its presence. Manitoba Harvest, SweetWater Brewing, and Breckenridge Distillery, among its U.S. businesses, are all profitable, according to the company. If federal legalization passes, their management hope that their overall business will become profitable.