What happened
The stock of Canadian cannabis company Aurora Cannabis (ACB -1.15%) has had an up and down week. Shares jumped more than 6% on Tuesday morning alone, yet the stock looks like it will end up with a double-digit decline for the week.
So what
Fellow Canadian grower OrganiGram Holdings (OGI 1.07%) reported its fiscal third-quarter 2021 financial results on Tuesday, and strong sales growth sent investors flocking to other marijuana sector names anticipating more good news. But a newly proposed bill from Sen. Chuck Schumer, a New York Democrat, to decriminalize marijuana in the U.S. received a chilly reply from the White House yesterday. That response reverberated with investors throughout the sector.
Image source: Getty Images.
Now what
The bill drafted by Schumer and two other Democratic senators seeks to legalize pot at the federal level, and remove marijuana from the Controlled Substances Act. When asked for a comment from the Biden Administration on the bill at a press briefing on Wednesday, press secretary Jen Psaki replied, "There's no new endorsements of legislation to report today."
The implied lack of support from President Joe Biden was seen as a blow for cannabis companies, including Aurora, that could greatly benefit from an open U.S. market.
OrganiGram reported Tuesday that gross sales for its quarter that ended May 31 soared 51% sequentially over the previous quarter, and 31% versus the year-ago period. But many investors believe long-term success for cannabis companies requires legalization in the U.S. Lack of support for that from the current administration means that could be a long way off.
