What happened

Canadian cannabis company stocks have taken a hit over the last six months, so it's not surprising to see an occasional bullish swing in shares. Today is one of those days. After each jumped about 5% earlier today, as of 3 p.m. EDT shares of Tilray (TLRY -0.59%), Canopy Growth (CGC -0.28%), and Hexo (HEXO) were 2%, 3.5%, and 1.7% higher, respectively. 

So what

These names broadly trade on two types of news, beyond individual financial updates. The industry continues to consolidate, and acquisition news gets significant interest from investors. Secondly, a sway in any direction related to political attempts to broaden legalization in the U.S. is another significant driver. On that front, yesterday was the deadline for public comment on the federal marijuana legalization bill Sen. Chuck Schumer and several of his colleagues have drafted and sponsored. And it seems that supporters have been flooding the political leaders with comments. 

Drawing of U.S. flag surrounded by marijuana leaves.

Image source: Getty Images.

Now what

The Cannabis Administration and Opportunity Act proposed by Schumer and two other Democratic senators in early July seeks to legalize pot at the federal level, and remove marijuana from the Controlled Substances Act. Senators got plenty of input leading up to the Sept. 1 deadline for comment, according to trade publication Marijuana Moment

The feedback came largely from pro-reform groups, though there was reportedly also response from prohibitionist groups seeking to address their concerns on the topic of legalization

The U.S. Cannabis Council expressed its support of the sponsor's goals, but noted that the Treasury Department's Alcohol and Tobacco Tax and Trade Bureau should be responsible for regulating the cannabis industry. The American Trade Association for Cannabis and Hemp stressed it supported "the need for increased recognition and understanding of the interaction with existing state-level regulatory frameworks, the treatment of hemp and CBD, and taxation policy."

The bottom line for Canadian cannabis companies is that if U.S. legalization occurs at the federal level, those companies stand to benefit. To that end, several have made inroads in the U.S. to be prepared for that potential outcome. Canopy Growth has a large investor in Constellation Brands, giving it a distribution network to lean on. Tilray has also made investments in the U.S., most recently with American retailer MedMen through convertible notes that would allow Tilray to obtain a majority position in the future. 

Many investments in Canadian cannabis companies are made counting on the potential opening of the huge American market. States have been progressing in that direction, and with a federal bill in draft form now too, proponents are making their voices heard.