Why Marijuana Stocks Are Hopping Again on Tuesday
Marijuana stocks are red hot Tuesday, as investors digest the latest cannabis news. And what news we've got! Last week, Vice President Kamala Harris voiced plans "to legalize marijuana" in the U.S. In just a few days, Germany will do just that, decriminalizing both marijuana possession and home cultivation of cannabis effective April 1.
Investors who pocketed gains yesterday are lining up to buy more on Tuesday. As of 10:40 a.m. ET, shares of marijuana stocks Cronos Group (NASDAQ: CRON), SNDL (NASDAQ: SNDL), and Canopy Growth (NASDAQ: CGC) are up 4.8%, 8.3%, and 11.8%, respectively.
Voters support cheaper marijuana
There's good reason for optimism. While U.S. federal marijuana legalization may or may not happen, support is building in Congress for legislation making sales at the state level -- where 24 states have fully legalized weed -- more profitable for the companies that sell it.
As cannabis news source Marijuana Moment reports, an American Bankers Association poll finds that 63% of voters polled support Congress passing a Secure and Fair Enforcement Regulation (SAFER) Banking Act to let cannabis companies secure loans and use other banking services. Leading senators such as Banking Committee Chairman Sherrod Brown and Senate Majority Leader Chuck Schumer already support the bill.
Legalizing bank services would lower the cost of doing business for companies that cultivate and sell marijuana, potentially making these businesses more profitable, allowing them to lower prices for consumers -- or both. As such, it's a logical next step for Congress to take, even prior to full-scale legalization.
Tick tock
All that said, Congress has been trying to pass "SAFER" for half a decade now, so far without success. While legalization is probably coming, in whole or in part, it remains to be seen which cannabis companies will survive to see it.
Analysts don't see Canopy Growth turning profitable before 2028 for example, or Cronos turning a profit... ever. SNDL, however, might earn a profit in 2025 -- and has enough cash to last eight more years at its current burn rate. When betting on marijuana legalization, don't forget to keep an eye on a company's cash.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends SNDL. The Motley Fool has a disclosure policy.
Why Marijuana Stocks Are Hopping Again on Tuesday was originally published by The Motley Fool
