Cannabis stocks extend rally amid positive news on regulatory front

Shares of Canadian Licensed Producers (LPs) and U.S. Multistate Operators (MSOs) traded higher on Monday, extending a rally that started days ago amid hopes of favorable views from the regulatory front on cannabis.

Media reports about a leaked letter from the U.S. Department of Health and Human Services recommending the U.S. Drug Enforcement Administration deschedule cannabis sparked the latest rally late August.

More catalysts followed last week when Senate Majority Leader Chuck Schumer in a floor speech discussed near-term legislative priorities, including “making progress on cannabis” with the advancement of the SAFE Banking Act.

A string of positive news appears to have rejuvenated the beaten-down cannabis players. Canadian L.P.s are among the notable gainers, with Canopy Growth (NASDAQ:CGC), Aurora Cannabis (NASDAQ:ACB), and Organigram Holdings (NASDAQ:OGI) all recording double-digit percentage gains on above-average volumes.

Clever Leaves Holdings (NASDAQ:CLVR), Village Farms International (VFF), Curaleaf Holdings (OTCPK:CURLF), Trulieve Cannabis (OTCQX:TCNNF), MedMen Enterprises (OTCQB:MMNFF), High Tide (HITI), and Cresco Labs (OTCQX:CRLBF) are also notable gainers.

As are cannabis-related ETFs: ETFMG Alternative Harvest ETF (M.J.), AdvisorShares Pure Cannabis ETF (YOLO), Global X Cannabis ETF (POTX), AdvisorShares Pure U.S. Cannabis ETF (MSOS), and AXS Cannabis ETF (THCX).

However, all stocks except a handful of companies, such as TerrAscend Corp. (OTCQX:TSNDF) and High Tide Inc. (HITI), have recorded sharp losses over the past 12 months.