Sundial Growers (NASDAQ:SNDL) stock is up 7% today on renewed optimism of federal cannabis legalization in the U.S.
SNDL stock is trending higher this morning on reports that the U.S. House of Representatives plans to vote once again on the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act. If passed, this bill would legalize cannabis at the federal level in the United States.
Prior to today’s move higher, SNDL stock had been in steep decline. Shares are down more than 30% over the last 12 months.
What Happened With SNDL Stock
Media reports say that lawmakers plan to take the MORE Act to the House floor next week. An earlier version of the cannabis legislation passed the House of Representatives during December 2020. It then stalled in the Senate.
Several other Canadian cannabis stocks are also trending higher today on news that the MORE Act will come to a vote, including Canopy Growth (NASDAQ:CGC), up 10% in pre-market trading, and Tilray (NASDAQ:TLRY), up 16% premarket.
Why It Matters
Federal legalization is seen as the key to the future success of cannabis producers, particularly those based in Canada. The U.S. market is 10 times larger than Canada and the cannabis market north of the border has already reached saturation. There, cannabis producers continue to struggle as they compete with black-market sales and regulations.
While several U.S. states, including California and Colorado, have legalized cannabis for recreational use, Canadian companies are limited in their ability to operate in America. This will largely remain the case until and unless federal legalization materializes. Many investors see the MORE Act as a critical step in that direction.
What’s Next for Sundial Growers
Cannabis stocks are getting a shot in the arm today on optimism that the MORE Act could finally be adopted in both houses of Congress and that cannabis consumption could be legalized nationally in the U.S. However, there is no guarantee that the MORE Act will be passed in the Senate this time around, or how far the legislation will get.
On the date of publication, Joel Baglole 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.