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Shares of cannabis companies jumped on Friday, capping off a week of monumental gains after the House of Representatives said it will soon vote on a bill to decriminalize marijuana—and although passage in the Senate is unlikely, optimistic investors see potential upside ahead for some of these stocks.
Sundial and Tilray are up about 50% but the gains may just be temporary.
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Cannabis stocks surged on Friday with Congress set to consider legalizing marijuana on a federal level, once again: Shares of Tilray Brands jumped nearly 23%, while Aurora Cannabis, Sundial Growers and Canopy Growth rose by around 10%.
Friday’s gains capped off a strong week of gains for many of these stocks, which have largely underperformed the rest of the market in recent years: Sundial is up 56% since Monday, Tilray 52%, Aurora 25%, Canopy Growth 21% and Cronos Group 16%.
Reports first emerged on Thursday in an industry publication that the House of Representatives will vote on a bill to decriminalize cannabis next week, called the Marijuana Opportunity Reinvestment and Expungement Act (MORE Act).
This will be the second time that the Congress has voted on legalization; a similar bill passed the House in 2020 but stalled in the Senate, and Wall Street analysts warn that a similar outcome could occur this time around.
While many experts remain skeptical of Congress passing comprehensive marijuana reform, some are still hoping that the industry will be allowed access to US banks, which are still essentially barred from dealing with cannabis-related businesses.
Earlier in the week, cannabis stocks had also gotten a boost from several major acquisitions within the industry: Cresco Labs is set to acquire Columbia Care for $2 billion, while Aurora announced it was buying TerraFarma in a roughly $38 billion cash-and-stock deal .