What happened
Shares of Aurora Cannabis (ACB -6.81%) were glowing green again Friday, up 4.4% as of 12:20 p.m. EDT, on the day after the website Marijuana Moment reported that Congress will vote on the legalization of marijuana next week.
It's not surprising that investors in marijuana stocks would be optimistic about this development. But didn't all the gains come already, when the news first broke yesterday?
Image source: Getty Images.
So what
Not necessarily. Marijuana Moment isn't one of the most widely read websites among stock market investors, but Barron's magazine is. And this morning, Barron's picked up the Marijuana Moment report, confirming that the House of Representatives said it would consider a bill to decriminalize marijuana next week.
That sounds pretty optimistic, and it explains why some investors might still be buying Aurora Cannabis stock today. But Barron's also said it expects the Marijuana Opportunity Reinvestment and Expungement Act (MORE Act) to clear the House once again, but still have no viable path to passage by the Senate, according to an analyst at the investment firm BTIG.
And that could actually be bad news for Aurora Cannabis stock.
Now what
Throw in the fact that President Joe Biden has said numerous times that he's not a fan of legalizing cannabis, and we're still potentially quite far away from actually seeing marijuana legalized at the federal level. It's for this reason that BTIG and Barron's doubt that the Senate will even try very hard to pass the MORE Act. In which case, investors might need to wait another year or more to see cannabis legalized at the federal level.
Aurora Cannabis stock is up today, but don't be surprised if it goes right back down next week.
