It has been a while since we’ve talked about cannabis stocks, but they’re popping up on investors’ radars on Tuesday. This group rallied rather nicely on the day.
More specifically, Tilray (NASDAQ:TLRY) stock closed up 7% today. Meanwhile, Aurora Cannabis (NASDAQ:ACB) closed up 9%, SNDL (NASDAQ:SNDL) up 8% and Canopy Growth (NASDAQ:CGC) up about 6% on Tuesday. Finally, Organigram (NASDAQ:OGI) closed up by 9%. These stocks are trending on hopes that Congress can give the cannabis group another lift.
That’s as Republican Senator Steve Daines, who is co-sponsor of a marijuana banking bill, “urged a group of bankers on Tuesday to lobby for the passage of cannabis banking reforms at Capitol Hill.”
The Secure and Fair Enforcement Banking Act — or SAFE Banking Act– would allow the marijuana industry to use the U.S. financial system. Currently, many of these companies struggle with banking options, given that marijuana is legal in many states but not legal on the federal level. The bill has already passed the House six times with bipartisan support. However, it has not made it through the Senate.
Daines had the following to say, per Seeking Alpha:
“I think with each passing year, there’s a greater number of people who understand that the problem—forcing businesses to operate in all cash—is only getting worse.”
Will It Matter for Cannabis Stocks?
It’s hard to get too bullish on cannabis stocks at this very moment. That’s particularly true due to this catalyst.
As previously mentioned, there seems to be little issue getting the bill through the House. However, the Senate has been a different story. While the Senate has seen a bit of a shakeup, the fact that this bill has failed so many times creates some hesitation about getting too bullish on it passing. And that’s combined with the fact these stocks have been real duds lately.
All of the cannabis stocks listed above have hit new 52-week lows in the last week. Some, like CGC and ACB, hit those lows just yesterday. Clearly, momentum is not on the bulls’ side at the moment.
While some investors are optimistic the bear market is coming to an end, a lot of mixed signals remain. As it relates to cannabis stocks, investors clearly aren’t feeling the “speculative bug” just yet.
Still, if progress is made with the SAFE Banking Act, that will at least give cannabis stocks one positive catalyst to work with.
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On the date of publication, Bret Kenwell did not hold (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.