The stock market was narrowly mixed on Tuesday, pulling back from some of its recent gains. Investors are hopeful for further stimulus measures from the federal government, but they're uncertain about just how big they'll be or what groups will benefit the most. As of 11:30 a.m. EST, the Dow Jones Industrial Average (^DJI -0.66%) was down 47 points to 31,339. The S&P 500 (^GSPC -0.23%) had fallen 7 points to 3,909, but the Nasdaq Composite (^IXIC -0.47%) had inched higher by 15 points to 14,003.

However, the news from the marijuana stock sector was a lot more positive. There, shares of major players in the industry soared, with a number of factors helping to lift sentiment about cannabis investing.

Marijuana leaf displayed on a pile of leaves.

Image source: Getty Images.

On a high

Gains were widespread across the marijuana industry. Stalwart favorites saw good-sized rises in their share prices, including a 10% jump for Aurora Cannabis (ACB 1.07%) and an 11% rise for Canopy Growth (CGC 4.95%). Cronos Group (CRON -0.98%) lagged slightly behind with a 7% rise, but some other players in the group put up even stronger performances.

Leading the way higher was Tilray (TLRY), which jumped 34%. The Canadian company made an agreement with U.K.-based medicinal cannabis company Grow Pharma under which Grow will import Tilray-grown medical cannabis products for U.K. patients. Under the deal's terms, Tilray expects it will be able to get products across the Atlantic and into consumers' hands by March, with access by prescription either through private practitioners or from the U.K. National Health Service.

The move for Tilray follows up on good news from merger partner Aphria (APHA) on Monday. Aphria has given Chief Strategy Officer Denise Faltischek a dual role in leading Aphria's Germany division, with the goal of expanding international use. Aphria shares were up another 20% on Tuesday morning.

A brighter future

Interestingly, the good news in cannabis came despite a somewhat mixed earnings report from Canopy Growth. Fiscal third-quarter revenue grew 23% compared to year-earlier levels, but Canopy reported a massive net loss of 829 million Canadian dollars. Free cash flow was also negative.

However, Canopy is optimistic about its future. CFO Mike Lee noted that Canopy's cost-savings program is paying off for the company, and he expects the cannabis giant to reach profitability during fiscal 2022.

The other positive factor for the cannabis industry is the effort in Washington to decriminalize marijuana at the federal level. Investors have been hopeful ever since the final results of the recent presidential and Congressional elections became known that such measures would stand a better chance of moving forward. The potential for growth stemming from opening up the U.S. market is substantial, and although decriminalization wouldn't instantaneously mean that Americans in all 50 states would be able to buy cannabis products, it would remove a major impediment to the growing trend toward legalization in many jurisdictions.

Be careful out there

Of course, longtime marijuana investors will remember that this isn't the first time hopes for the future have caused a surge in cannabis stocks. Past rises gave way to precipitous declines. Yet with most stocks far below their levels from bull markets in past years, there's room for optimism right now without necessarily raising concerns about irrational exuberance in pot stocks.