What happened

Several cannabis stocks were flying higher on Thursday. Aphria (APHA) had the biggest gains, with its shares up 8.8% as of 11:41 a.m. EDT. OrganiGram's (OGI -5.10%) shares jumped 7.1%.

It wasn't just Canadian cannabis stocks that enjoyed solid gains, though. Shares of U.S.-based Curaleaf Holdings (CURLF -3.25%) were also up 8.8%. Green Thumb Industries (GTBIF -3.87%) and Charlotte's Web Holdings (CWBHF -8.93%) weren't too far behind, with gains of 7.9% and 6.6%, respectively.

There are two likely reasons for these moves today. In the vice-presidential debate Wednesday night, Democratic vice presidential candidate Sen. Kamala Harris promised that a potential Biden administration would decriminalize marijuana. Also, Vermont became the 11th state to legalize recreational marijuana on Wednesday.

Cannabis with line trending upward and money in the background

Image source: Getty Images.

So what

Neither Sen. Harris' comments nor Vermont's recreational marijuana legalization will do anything to boost any of these cannabis stocks' immediate prospects. Even if Democratic presidential nominee Joe Biden and Harris win the election next month, they won't take office until January 2021. Vermont isn't expected to open its recreational pot market until October 2022.

However, investors' sentiment is important for stocks. And it appears that many investors are more optimistic about the cannabis industry and, in particular, the possibility of movement toward the legalization of cannabis at the federal level in the U.S.

U.S.-based cannabis companies would be the biggest beneficiaries if federal marijuana laws are changed. Curaleaf and Green Thumb, for example, currently can't list their shares on major U.S. stock exchanges. Their shares would almost certainly soar if the companies could operate in full compliance with all federal laws.

Canadian cannabis producers such as Aphria and OrganiGram could also be winners if U.S. marijuana laws are revised. The companies can't operate in the U.S. marijuana market right now and retain their listings on U.S. stock exchanges.

Charlotte's Web is perhaps the most surprising big riser today. The company sells hemp-based products. Hemp is already legal at the federal level in the U.S. However, Charlotte's Web is often categorized as a marijuana stock -- and a rising tide tends to lift all boats.

Now what

The countdown is on for the U.S. elections on Nov. 3. Perhaps the most important races for investors to watch are in the Senate. If the Democrats regain control of the Senate and retain a majority in the House of Representatives (as they're expected to do), the prospects of federal marijuana reform will be much brighter than they are now.