After a multiday rise, cannabis stock prices are turning around this morning. As of 10:32 a.m. ET, Canopy Growth (NASDAQ: CGC) was down 8.32 percent, Aurora Cannabis (NASDAQ: ACB) was down 6%, and Sundial Growers (NASDAQ: SNDL) was down 2.89 percent.
What is causing controversy this morning?
Over the past few days, the biggest cannabis stocks in Canada have risen in anticipation of the expected presentation of the Senate’s long-awaited Cannabis Administration and Opportunity Act (CAOA). A report from Marijuana Moment says that Democratic Senators Chuck Schumer, Ron Wyden, and Cory Booker introduced the bill today.
Why are investors making a profit off of this possibly revolutionary news? The short version is that there isn’t much possibility that CAOA will really pass in the Senate during the current session. Republicans haven’t expressed much support for the proposal, while a number of influential Democratic senators have publicly stated their opposition to federal marijuana legalization.
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It’s crucial to realise that for CAOA to pass in the Senate, there must be 60 votes. That is a significant political obstacle that currently looks far too high to overcome.
Furthermore, it’s very possible that short-sellers were reducing their relatively sizable positions in Aurora, Canopy Growth, and Sundial Growers prior to the bill’s official introduction today. These names were, after all, unquestionably top targets for speculators and day traders seeking an immediate momentum play.
However, now that the news has been made public, the momentum crowd seems to be moving on, and short-sellers are likely to be investing again in these cannabis stocks. After all, the domestic market has been oversaturated with well over 800 licensed cannabis producers, retailers, and processors, which has harmed Aurora, Canopy Growth, and Sundial Growers equally.
Also Read: Hemp, CBD legalised in NC at the last minute
What’s the point?
On the plus side, the fact that the Senate has formally taken up this historic piece of cannabis legislation is unquestionably a positive move. The U.S. marijuana market is expected to reach a value of $100 billion one day, which will help struggling growers like Aurora, Canopy Growth, and Sundial Growers.
Before prohibition in the US officially expires, investors in the cannabis industry will undoubtedly have to wait a while longer. In other words, unless you want to own these Canadian pot stocks for a very long time, you might not want to purchase shares.
The marijuana stock you’ve been looking for is finally here. Some analysts believe that a little-known Canadian startup has just discovered the secret to capitalizing on the upcoming marijuana boom.
Also Read: Best Cannabis Stocks To Buy Long Term?
And make no mistake, it’s on the way. In the past several years, recreational marijuana has been authorized in 19 states plus Washington, D.C., and in October 2018, Canada became the latest country in North America to fully legalize cannabis.
And because of the coming marijuana revolution, a little-known Canadian business is about to take off. Because the Ontario government and this formidable corporation have struck a game-changing agreement, and if you have ever contemplated investing in marijuana stocks, you need to hear this story right away.
