What happened
It wasn't exactly a Marijuana Monday for pot sector stocks on the first trading day of this week. Many got hammered during the session, with U.S. multi-state operators Curaleaf (CURLF +2.57%) and Green Thumb Industries (GTBIF +2.03%) falling at double-digit rates of 17% and 12%, respectively.
Major Canadian weedies also got slammed; Tilray Brands (TLRY 0.90%) declined by nearly 9%, while Aurora Cannabis (ACB +0.29%) and SNDL (SNDL 0.35%) competed in the race to the bottom by tumbling a respective 9% and 10%. The culprit was yet another looming setback on the North American legalization front.
So what
On Friday, according to numerous media reports, Senate majority leader Chuck Schumer scrambled to get a major piece of marijuana reform legislation passed in the current lame-duck congress.
Those articles stated that Schumer was pushing to include the Secure and Fair Enforcement (SAFE) Banking Act in a larger omnibus funding package currently being considered by that body.
The act has been passed in the House of Representatives but has faced stiffer resistance in the Senate, which is currently split 50/50 between Democrats and Republicans. Although SAFE enjoys a degree of bipartisan support, it is opposed on various grounds by powerful senators including minority leader Mitch McConnell.
NASDAQ: TLRY
Key Data Points
Now what
As the current Congress is rapidly approaching its expiration date, this is considered to be the last shot at squeezing some form of marijuana reform into law. Unfortunately for pot aficionados, not to mention investors in the sector, this is likely to end in failure like the previous efforts given the stiff resistance. Meanwhile, the political composition of the incoming Senate isn't much different than the present one.
Legalization -- or the lack of it -- has a major impact on not only U.S. producers and retailers like Curaleaf and Green Thumb, but also their Canadian peers such as Tilray, Aurora, and SNDL. After all, they can only benefit (and handsomely) from the opening of our wide, vast, and very populous market.
