What happened
This is it -- the week that marijuana takes its next step toward legalization. The House Rules Committee is scheduled to take up the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act today, and prepare it for a floor vote later in the week.
But if that's true, why are marijuana stocks going down today? As of 10 a.m. ET, not only is Sundial Growers (SNDL) stock down 7.6%, but Aurora Cannabis (ACB -5.67%) is down 9.1%, and Canopy Growth (CGC -6.62%) stock is leading the whole cannabis sector lower with a 10.5% loss!
So what
The Hill reports today that the MORE Act "has near-uniform support among Democrats and a top ally in Senate Majority Leader Charles Schumer," whose chamber "unanimously passed a bill to expand scientific and medical research on marijuana and its compounds" on Thursday.
Yet supporters may still be nervous. The Rules Committee meeting scheduled for Wednesday was originally planned for today. It's unclear what this means, if anything, but supporters of marijuana legalization have been disappointed before. In fact, this same MORE Act passed a House vote in December 2020 -- only to die later in the Senate.
Image source: Getty Images.
Now what
Should this delay worry advocates of marijuana legalization? I don't think so.
The unexpected two-day delay notwithstanding, a 483-page report prepared by the House Judiciary Committee for use by legislators voting on the MORE Act makes a compelling case for passing the law. The report points out how "public support for making marijuana legal has increased over the past two decades," how the trend of increasing "state-level legalization of marijuana has placed states in apparent conflict with federal law" and made it hard for federal law enforcement to do its job, even as cannabis companies struggle to do business without access to financial services (because banks don't want to run afoul of federal law).
A report today by MarijuanaMoment.net -- run by Tom Angell, a longtime legalization activist -- argues that "the MORE Act presents solutions to these challenges and would help align federal policy with [laws] that have been enacted in a majority of states as the legalization movement continues to expand."
Simply put, it makes sense that this law should pass this week -- probably by Friday.
But given how powerfully marijuana stocks performed last week -- with Canopy stock up 22%, Aurora Cannabis rising 26%, and Sundial shares notching a 56% gain -- investors may be thinking that discretion is the better part of value here.
That's probably why they're selling off marijuana stocks today -- just in case history repeats itself.
