What happened

Marijuana stocks just keep lighting up. Ever since the U.S. Department of Health and Human Services told the Drug Enforcement Agency last month that it thinks cannabis should be knocked down from a Schedule I narcotic to Schedule III status, cannabis companies like Aurora Cannabis (ACB -0.15%), Canopy Growth (CGC 2.41%), and Curaleaf Holdings (CURLF 5.26%) have been hitting progressively higher highs and lower lows.

And Friday is no exception. As of 2:25 p.m. ET, Aurora Cannabis shares are up 9.4%, while Curaleaf is tacking on 14.4%, and Canopy Growth lives up to its name, growing faster than anybody else at 16.4%.

So what

So why the continued enthusiasm over news that's more than a week old already? It's because the news just keeps getting better and better for marijuana investors. Last weekend, for example, President Biden threw his support behind legalizing medical marijuana. And on Wednesday, Senate Majority Leader Chuck Schumer, the New York Democrat, said he hopes to make progress on passing the Secure and Fair Enforcement (SAFE) Banking Act this session, making it easier for marijuana businesses to access banking services.

Now, there's even more good news on both those fronts. The pot news website Marijuana Moment reported late yesterday that a new study out of Australia on medical marijuana shows that pot smokers enjoy "improved quality of life, and lower pain, anxiety and depression" than those suffering from chronic health conditions who don't smoke pot.

The study added the advisory that these benefits require three months of use, but if you're an investor in a marijuana stock, knowing that patients need to use pot for at least three months at a time is not bad news.  

Meanwhile, in a separate Marijuana Moment article, both Republican and Democratic senators are talking up the prospects of passing Schumer's SAFE Banking Act. Republican co-sponsor Senator Steve Daines, a Montana Republican, says talks over the SAFE Act's passage are "moving in the right direction." And Senate Banking Committee Chairman Sherrod Brown, an Ohio Democrat, says agreement on the legislation could potentially come as soon as six weeks from now.  

Now what

According to Marijuana Moment, support is holding steady with the SAFE Banking Act having 42 co-sponsors, and enough overall support to reach the 60 votes needed for Senate passage. Schumer is said to feel confident that the legislation will pass a floor vote. And after that, the bill only has to pass a vote in the House, which has already approved it several times in years past.

At this point, it seems the greatest risk is that overconfident legislators might try to load the bill with a grab bag of related marijuana measures. These could include expunging the criminal records of past drug offenders, permitting cannabis businesses to apply for small-business loans backed by the government, and (something of particular interest to investors) allowing U.S.-based marijuana stocks to list on U.S. exchanges.

Nice as that would be, however, most senators seem to prefer a more gradual approach of passing laws one at a time, and marching slowly but steadily toward full-scale marijuana legalization. But hungry for its own piece of the marijuana pie, the American Bankers Association is now advocating openly for the SAFE Banking Act's passage as-is.  

With both bankers and marijuana advocates now lobbying in support of this bill, the chances we will see the SAFE Banking Act passed in 2023 look stronger than ever.