Cannabis stocks continued their post-election rise from the ashes Monday, ahead of votes this week regarding decriminalization in the U.S. House of Representatives and at the United Nations.
Just after markets closed early on Black Friday, the House announced a scheduled vote Wednesday on the Marijuana Opportunity Reinvestment and Expungement Act. The bill, known by the acronym MORE, would decriminalize marijuana on the federal level and make other changes, though it is unlikely to become law soon because the U.S. Senate has not shown willingness to act on it.
The United Nations Commission on Narcotic Drugs will begin meeting on Wednesday as well, and is expected to vote on World Health Organization recommendations related to cannabis. The most prominent suggestion is to remove cannabis from a list of illegal narcotics, which — while largely symbolic — could help with legalization efforts in several countries, especially regarding medicinal marijuana.
Those votes follow legalization of recreational-cannabis sales in four additional states on Election Day, which means that one-third of Americans now live in states that have fully decriminalized the drug. Stocks in marijuana companies have been flying higher since the election, after getting pummeled amid difficulty reaching heights expected after Canada federally approved legalization in October 2018.
Aurora Cannabis Inc.
jumped as much as 19% in Monday trading, despite a report that it plans to close its Aurora Sun facility in Alberta, a major growing operation that had been hailed repeatedly by former executives. “Aurora had indicated … that the headcount and production right-sizing was behind them, but these additional layoffs at Aurora Sun imply further unfavorable/unanticipated shifting in supply/demand equilibrium,” MKM Partners analyst Bill Kirk warned in a note passing along the news Monday morning.
Sundial Growers Inc. shares
had more than doubled at times in Monday trading, after the company extinguished some debt. Sundial was valued at more than $1 billion in its initial public offering, but shares have withered on the open market as the company struggles to live up to its promises.
Other large Canadian cannabis companies — which, unlike U.S. pot companies, are allowed to trade on major U.S. exchanges because the drug is legal nationwide in Canada — also enjoyed strong trading sessions Monday.
gained more than 12% at its peak, and cannabis-pharmaceuticals company GW Pharmaceutical PLC
increased in value by more than 7%. The ETFMG Alternative Harvest ETF
and Horizon Marijuana Life Sciences Index ETF
both were more than 3% higher at times in Monday trading.