Weed stocks rebound after House committee backs legalization
Weed stocks jump up out of the toilet.
A historic — but mostly-symbolic — vote by the U.S. House Judiciary committee to decriminalize weed across the U.S. Wednesday sent pot stocks up Thursday.
The biggest Canadian weed companies, Canopy Growth, Aurora Cannabis and Aphria all rose between 8 and 15 percent, Reuters reported. A fund that tracks big weed companies, Alternative Harvest, was up 8 percent. (Most American weed companies aren't listed on stock exchanges, since weed is federally illegal in America.)
The bill — The Marijuana Opportunity, Reinvestment, and Expungement Act (MORE) — would de-schedule weed and clear the records of weed convicts. It now goes to the full House, which is controlled by Democrats, and is likely to pass. The Senate is controlled by Republicans, however, who are unlikely to approve of legalizing the plant.
But the historic vote reassured weed investors many politicians support changing the laws. Two Republicans on the committee voted for the bill, while eight Republicans opposed it. And many of the Rebpublicans who didn't vote for the bill admitted that marijuana prohibition isn't working, they just didn't like the way in which the MORE Act legalized the plant. They tended to support allowing the states to keep making the rules.
If Democrats win the Senate in elections next year — a long-shot — marijuana might be legalized across the country.
The day's raise in stock prices was a welcome one for weed investors, as it's been a hard year for cannabis stocks. After Canada legalized and investors rushed into the market, sending stocks up, stocks quickly turned downward, dropping at least 25 percent in value over the past year. Analysts declared that the "weed bubble has burst."
The cause of the drop was an oversupply of weed in Canada and a lack of shops selling the weed. Big weed companies Aurora and Canopy had dropped in value more than 40 percent each over the past year, and Tilray dropped 70 percent.
Weed can be sold across Canada. But the big money in pot stocks will come when it can be sold across the U.S., a country nearly ten times as big. Thirty-three American states have medical marijuana, and 11 have adult-use. A new survey by Pew shows that two-thirds of Americans support legalizing weed. And, now, at least one committee in the U.S. House agrees.