Cannabis stocks rallied on Thursday morning as investors digested a House vote that would possibly favor a bill to lift the federal ban on marijuana.
Large cannabis players like Canopy Growth (NYSE: CGC) saw it shares rally as much as 20%. Aurora Cannabis (NYSE: ACB) shares gained 11.3%, Cronos Group (NASDAQ: CRON) witnessed its shares increase by 14.1%, while Aphria (NYSE: APHA) shares edged higher by 11.5%.
The ETFMG Alternative Harvest ETF bounced by 8% on Thursday, with 32 of the 36 components trading higher, after being hammered the whole year.
The bill was introduced by Judiciary Committee Chairman Jerrold Nadler, a New York Democrat. The bill on Wednesday passed a by a 24-10 vote in favor, which would include provisions to expunge past criminal records and impose a 5% cannabis sales tax, according to MarketWatch.
“The vote was mostly symbolic and is just the first step toward full legalization,” said Jason Wilson, banking and cannabis expert at the ETF. “But legalization will come eventually and there’s still a lot of money on sidelines looking to get into the space.”
The upbeat news comes after the cannabis industry has been beaten down by disappointing financial results and the slower-than-expected rollout of Canada’s legal market.
Notably, many companies primarily blamed the slow rollout on shortages in retail stores as well as government regulations, which ultimately caused the black market to continue thriving.
Canopy Growth was also accelerated by Bank of America’s upgrade.
Bank of America analysts upgraded the stock from a “neutral” rating to a “buy,” saying that the worst look for Canopy is over. Bank of America analyst Christopher Carey maintained his CAD 24.00 (USD 19.00) per share price target.
Previously, Carey was “concerned” for Canopy Growth about its sales estimates. However, after considerable consensus cuts, Carey believes its estimates seem much more achievable.