Cannabis stocks are once again on the move! Risk-on sentiment appears to be taking over the market once again. Last week’s dip has proven to be a great buying opportunity for traders.
Cannabis Stocks Buoyed by Virginia Legislation
On Saturday, lawmakers in Virginia approved a bill that would allow for recreational marijuana use by 2024. This bill has been expected for some time, so perhaps the market was delayed in its response to the bill. Perhaps investors have just been seeking another reason to pile into this trade. Whatever the reason, cannabis stocks are up broadly today. Sundial, Tilray, Aphria and Canopy all posted intraday gains of 6%, 9%, 4.5% and 2%, respectively, at the time of writing.
This bill is expected to be signed by the state’s governor, which would make Virginia the 16th state to legalize recreational marijuana. Importantly, this would be the first southern state to do so.
Investors bullish on federal legalization are likely viewing this move as indicative of how far the pendulum has swung in political circles in terms of gaining approval for cannabis legalization. Having a southern state jump on board appears to be very bullish for this view. Accordingly, investors seem content with adding to existing positions, and new investors seem eager to jump aboard.
Canopy Growth Gets Some Growth
In addition to the bullish news regarding Virginia legislation, Canopy has some headlines of its own.
Today, Canopy announced the launch of a new sparkling water cannabis-infused beverage. Canopy is battling with Hexo (NYSE:HEXO) for market share lead in the cannabis-infused beverage space. Accordingly, some investors bullish on the higher-margin “Cannabis 2.0” product segment may be focusing more heavily on names like Canopy and Hexo right now.
Additionally, Canopy has a deal in place to acquire U.S. multistage cannabis company Acreage Holdings, which would allow for the sale of THC products. This would follow federal legalization, but is another catalyst that is being stoked by the recent Virginia bill.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article.