Cannabis stocks soar as U.S. House committee clears bill on federal weed legalization

Cannabis stocks soar as U.S. House committee clears bill on federal weed legalization

Marijuana company shares soared on Thursday after a U.S. congressional committee cleared a legislation to decriminalize cannabis. This moves the bill a step closer to being approved by the Democratic-controlled House of Representatives.

The bill, which was passed 24 to 10 in the House Judiciary Committee on Wednesday, sent shares of Canopy Growth, Aurora Cannabis , Aphria Inc,  and Tilray Inc up between 8% and 15%.

“We think federal legalization would be a big positive for investor sentiment surrounding cannabis equities, which have been battered by oversupply and a steep price decline for the underlying commodity since becoming legal in Canada,” said Garrett Nelson, senior equity analyst at CFRA Research.

The approval comes two months after the House passed a bill to advance legislation that would allow banks to provide services to cannabis companies in states where it is legal.

The latest bill enables states to set their own policies while allowing the expunging of federal marijuana convictions and arrests.

Additionally, the bill will authorize a 5% federal sales tax on marijuana products that are manufactured in or imported into the United States.