What happened 

The week started off on a high note for cannabis investors. Here's how some of the most popular marijuana stocks fared today:

So what

Reports of a forthcoming Republican-led marijuana legalization bill appeared to drive excitement for pot stocks among investors. Draft legislation led by Rep. Nancy Mace of South Carolina, aiming to decriminalize marijuana at the federal level, could be filed as soon as this month, according to cannabis news site Marijuana Moment. The bill will reportedly seek to treat cannabis similar in some ways to alcohol and impose relatively low excise taxes on marijuana sales.

A miniature gold bull is on top of a keyboard button labeled buy.

Weed stocks were back on investors' buy lists on Monday. Image source: Getty Images.

Speculation that industry consolidation could heat up in the coming weeks also appeared to contribute to marijuana stocks' gains after New Cannabis Ventures founder Alan Brochstein posited that Altria (NYSE:MO) could soon acquire Cronos Group. The tobacco titan purchased a 45% stake in the Canadian cannabis producer for $1.8 billion in 2019. The deal also included warrants that would allow Altria to increase its ownership in Cronos Group to 55% for an additional $1 billion investment.

Now what 

Acquiring Cronos could help Altria diversify its revenue streams and bolster its growth prospects. This would be particularly true if federal legalization efforts were to gain steam, as it would allow the combined company to enter the potentially massive U.S. cannabis market on a far broader scale.

Such a deal would also be likely to boost sentiment among investors for marijuana businesses, some of which could become takeover targets for other large consumer goods companies.

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