What happened
Canadian pot stocks are jumping today. Shares of Tilray (TLRY) and Sundial Growers (SNDL -3.38%) rose over 9% in early trading, and were still up 2.8% and 4.4%, respectively, as of 12:15 p.m. ET. The stock of Canadian peer OrganiGram Holdings (OGI -1.03%) wasn't quite as positive, though its shares were also 1.7% higher as of that time.
So what
Some of today's action may be the result of investors anticipating upcoming quarterly financial reports. Sundial, in fact, was scheduled to release its fourth-quarter earnings after the market close last night, but has delayed the report. The company did say, however, that it expects to report record adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) from continuing operations for the full-year 2021 when it releases its report on or before April 14. But it is what is happening in the U.S. Congress that is likely piquing investor interest the most today.
Image source: Getty Images.
Now what
The real excitement for cannabis stocks is being driven by another chance for the Marijuana Opportunity, Reinvestment, and Expungement (MORE) Act to be passed by the U.S. House of Representatives this week. Passage of the legislation by the House and then the Senate would pave the way for decriminalization of cannabis at the federal level. Today, the House Rules Committee is scheduled to hold a hearing on the MORE Act.
Investors need to temper their expectations. The House of Representatives previously passed it in December 2020, but the bill didn't get brought up for a vote in the Senate. If it does make more progress toward passage this time, the ramifications are huge for Canadian cannabis companies.
Tilray, which will report its third-quarter fiscal 2022 financial results on April 6, has already made several investments in the U.S. that it hopes will provide infrastructure for its marijuana business if it becomes legal for it to enter the market. Those investments include the acquisition of craft brewer SweetWater Brewing and a majority position in the outstanding senior secured convertible notes of U.S.-based cannabis retailer MedMen Enterprises.
A full House vote on the MORE Act is expected on Friday. Cannabis investors will be watching, and should be aware that marijuana stocks may remain volatile for the remainder of the week.
