Cannabis stocks Tilray Brands and Sundial Growers soared more than 19% each, extending their gains from Thursday as a House panel said it would vote next week for the second time to decriminalize marijuana.
Pot stocks also got a boost from news that the Senate passed a bipartisan bill that would expand scientific and medical research on marijuana and its compounds. The global cannabis market’s growth hinges on legalization in the U.S. However, the glacial pace of federal legalization efforts in the U.S. has sowed more doubts it will happen anytime soon.
Both Tilray and Sundial jumped to their highest levels since late last year. Other cannabis stocks like Canopy Growth Corp. and Aurora Cannabis Inc., which closed up between 8% and 11% on Thursday, also rose Friday. ETFMG Alternative Harvest ETF, the largest fund tracking the pot industry, jumped 6%.
Analysts seemed less enthused by the developments, saying any decriminalization would run into obstacles in the Senate.
“Cannabis legislation is not about the House or the White House. It is all about the Senate,” Cowen analyst Jaret Seiberg wrote in a note, adding that the House vote next week will be symbolic and should demonstrate how much support cannabis legalization has in the House.
It’s been an optimistic week for pot stocks. Two acquisition deals announced earlier in the week sparked the initial rally in the sector with Cresco Labs agreeing to buy Columbia Care for about $2 billion, and Aurora Cannabis’s purchase of TerraFarma Inc., owner of craft cultivator Thrive Cannabis.
While most marijuana stocks are still in the red this year, Tilray’s shares are now about 12% higher in 2022.
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