Cannabis Stocks Rebound Sharply

Cannabis stocks moved higher on Wednesday, snapping a six day losing streak for the sector that came in response to poor third quarter financial results from most of the major players within the space and continuing bad news from several companies.

The move higher on Wednesday came following news of a push to legalize marijuana at the Federal level in the U.S., ending a decades old ban on the substance, and reversing past convictions. The House Judiciary Committee is pushing the bill that would lift the Federal ban on marijuana, claiming that the laws have had a negative impact on sectors of the U.S. population.

Shares of Aurora were 22.2% higher on Wednesday, while Canopy Growth shares advanced 15.7%. Shares of Hexo advanced 33.3%, and elsewhere in the sector Tilray climbed 4.7% higher, Aphria saw shares advance 5.5%, and Cronos shares added 2.6%.

The news is definitely a positive for the downtrodden sector, and investors are ready to bake some of the good news into prices.

There’s no guarantee at this point that the bill will be taken up by the Senate, which has already shot down a bill that was meant to provide protection to banks serving the cannabis industry in states that have legalized.

The battering the stocks have taken over the past six months is also helpful for bargain hunters, who are now able to snap up shares at less than half what their values were at the start of the year. Paradoxically, the worse things get the better they are for those with a long-term horizon.