What happened
Canadian cannabis stocks popped Friday morning, led by Canadian grower Tilray (TLRY 0.58%), which jumped nearly 20% in early trading. Tilray gave back some of those gains, as did the stocks of peers Canopy Growth (CGC 1.28%) and Sundial Growers (SNDL 2.19%). As of 1:36 p.m. ET, Tilray shares were 14.3% higher for the day. Canopy Growth and Sundial shares were up 4.9% and 5.1%, respectively.
So what
The stock gains came on news that the U.S. Congress has passed a piece of legislation supporting marijuana research, and more significantly, will be holding a floor vote on the Marijuana Opportunity, Reinvestment, and Expungement (MORE) Act next week. The House of Representatives previously passed that legislation, but it stalled in the Senate.
Image source: Getty Images.
Now what
Tilray and other Canadian cannabis companies need federal legalization in the United States to realize the full potential of markets they want to serve. The House of Representatives previously passed the MORE Act in December 2020, but the bill didn't get brought up for a vote in the Senate. The legislation would remove cannabis from the list of federally controlled substances and would bring reforms to cannabis-related criminal penalties.
The House will again bring the bill up for consideration next week, according to the House legislation schedule. That was enough to trigger a run up in marijuana stocks today. But it wasn't the only positive news for the sector yesterday.
The Senate also approved another marijuana bill on Thursday. Not as impactful as the MORE Act, a bipartisan piece of legislation passed unanimously that will promote marijuana research, according to sector news source Marijuana Moment.
That bill, named the Cannabidiol and Marihuana Research Expansion Act, would help streamline research and support the Food and Drug Administration (FDA) to develop and approve cannabis-derived medicines. Bill sponsor Sen. Dianne Feinstein said in a statement: "Current rules and regulations make it hard for researchers to study how marijuana and marijuana-derived medications can best be used to treat various conditions. This important legislation will cut the red-tape around the research process, helping get FDA-approved, marijuana-derived medications safely to patients."
That passage brought some added momentum to the sector with potentially more impactful results to come next week, depending on the progress of the MORE Act legislation. Cannabis investors will be watching closely.
