On Wednesday, Nov. 20, the House of Representatives' Judiciary Committee approved the Marijuana Opportunity Reinvestment and Expungement (MORE) Act. The move is a crucial step in making the bill a federal law. The act passed easily in the committee, by a vote of 24 to 10, following more than two hours of debate.

Arguably the bill's most critical feature is that it "deschedules," or eliminates, marijuana from the list of prohibited items under the federal Controlled Substances Act, effectively legalizing the drug.

Other aspects of the proposed law include a 5% tax on cannabis goods and a requirement that federal courts expunge old marijuana-related convictions for people once found guilty of such violations.

The words illegal and legal spelled out in dice next to marijuana leaf symbols.

Image source: Getty Images.

Currently, marijuana legalization is a state-by-state patchwork in the U.S. A few states have legalized cannabis for both medical and recreational use, while others allow medical cannabis only and some haven't sanctioned either form.

The MORE Act is the second bill in recent months to gain traction in the House. In September, the House as a whole overwhelmingly passed the Secure and Fair Enforcement (SAFE) Banking Act. That measure is aimed at freeing banks and credit unions to provide certain ground-level financial services for companies involved in the cannabis trade, such as dispensaries.

Like the SAFE Banking Act, it's likely that the MORE Act will pass in a full House vote given that it enjoys widespread support among the majority of Democrats. Similar to what happened with the former, the MORE Act should also garner a host of yes votes from reform-minded Republicans.

A larger concern is the Senate, where a bill passed by the House must go for approval in order to become law. Senate Majority Leader Mitch McConnell has indicated his resistance to cannabis reform, while the White House has signaled tepid support at best. Many political pundits believe that neither the SAFE Banking Act nor the MORE Act has a high chance of passing in the current Senate.

Nevertheless, investors in marijuana stocks reacted positively to the news of the MORE Act's progress. Aurora Cannabis (NYSE:ACB) shares closed Wednesday up by 13%, while rival industry bellwether Canopy Growth (NYSE:CGC) went up 15%.

Even though both Aurora Cannabis and Canopy Growth are based in Canada, the opening of the massive U.S. market would widen their business opportunities considerably.

Given the apparently dim prospects for passage in the Senate, though, this current rally might not be sustained enough to mitigate the recent unpopularity of marijuana stocks. Even when today's jumps are taken into account, both Aurora Cannabis and Canopy Growth are down significantly on a year-to-date basis, the former by 56% and the latter by 45%.