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Is it 2018 all over again? For investors asking: “Why are cannabis stocks up today?” The question of whether we could be seeing the latest mania in this space is intriguing to consider in its own right.
A range of cannabis stocks, including Curaleaf Holdings (OTCMKTS:CURLF), Green Thumb Industries (OTCMKTS:GTBIF), Columbia Care (OTCMKTS:CCHWF), Cresco Labs (OTCMKTS:CRLBF) and Trulieve Cannabis (OTCMKTS:TCNNF) saw significant gains this morning.
Some have dipped into the red during afternoon trading, but they all spiked on news that the Senate will be voting on a marijuana banking bill, likely during the last week of September.
This vote will center around the SAFE Banking Act, which currently prevents cannabis companies from gaining access to the financial system. If enough votes are cast to pass the bill, cannabis companies could finally have access to the traditional financial system, something that’s bogged this sector down for years.
This news, in combination with the previously announced headlines that the Drug Enforcement Administration () is considering rescheduling cannabis, is leading to some investor optimism around these more speculative stocks.
Why Are Cannabis Stocks Up Today?
Since cannabis was legalized in Canada approximately five years ago, investors have been on a wild ride in this sector. Of course, for most cannabis stocks, the ride hasn’t been pretty. That’s because plenty of fantastical demand predictions didn’t play out, and the U.S. market didn’t follow Canada’s suit immediately in legalizing cannabis federally. In fact, in the past five years, few steps toward such a move have been made to suggest this could happen anytime soon.
That’s why the recent news that cannabis could be rescheduled is such a big deal. Today’s update that the banking laws could be changed to accommodate dispensaries, cannabis producers, and other companies in the sector is also very welcome news for investors.
Now, of course, the question is whether these steps toward a more favorable regulatory environment will ultimately lead to legalization (in some reasonable timeframe). The jury’s still out on this front. However, it’s clear investors now have a reason to get excited about these stocks once again.
That’s all the sector could need for another “green rush” to materialize, so these are some stocks to put on the watch list for now.
On the date of publication, Chris MacDonald 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.