Today, cannabis stocks are absolutely taking off. Indeed, this move is welcome news for investors in a whole swath of cannabis names.
For investors in cannabis producers such as Tilray (NASDAQ:TLRY), Cronos (NASDAQ:CRON), Aurora Cannabis (NASDAQ:ACB) and Sundial Growers (NASDAQ:SNDL), this year started great, but has since fizzled out.
What started as excitement around the presidential victory of Joe Biden has turned into disappointment over a lack of movement in this space. Domestic cannabis consumption continues to grow. However, without federal standards around the legalization of this drug, investors aren’t so sure about the future of this business.
Accordingly, investors in the cannabis sector have reason to cheer today. Let’s dive into a couple of reasons why investors are jumping back into this sector right now.
Cannabis Stocks Higher on Potential Legalization Prospects
Today marks the most significant up day for cannabis stocks in some time. Each of the four aforementioned producers are up between 7% and 22%, at the time of writing.
These outsized moves appear to be directly linked to movement on the legislative front. This past Friday, the Biden Administration received a big win, with the passage of the highly anticipated $1 trillion infrastructure spending bill. This legislative victory has signaled movement on other hot button issues could happen sooner than later.
Additionally, a report circulated today suggests that Republican Nancy Mace could be working on circulating the States Reform Act to legalize cannabis federally. Such news, if true, would suggest that there’s movement from both sides of the aisle on this issue. Accordingly, investors have reason to be very optimistic once again with cannabis stocks.
Whether this optimism will prove to be misplaced or well-deserved remains to be seen. However, this is a sector that looks like it could get red-hot once again.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.