The positive performance of cannabis stocks last week driven by enthusiasm around the potential rescheduling of marijuana as a lower-risk drug in the US is set to continue as progress is made on cannabis banking reform in the country, according to analysts at Water Tower Research.
The analysts wrote in a note to clients that they have heard from multiple sources that the Senate Banking Committee will vote on the Secure and Fair Enforcement (SAFE) Banking Act, which would remove penalties for companies that provide banking and other financial services to legitimate cannabis-related businesses, on September 18.
Should the committee vote in favor of the act, it would progress to a Senate floor vote later in the fall.
The analysts noted that, while global equities gave back most of last week’s gains, cannabis stocks bucked the trend and booked another winning week.
“The US cannabis MSOS ETF finished up 21.88%, while the global YOLO ETF gained 12.26%,” they wrote in a note.
The analysts noted that US cannabis had been outperforming because the catalysts driving the gains, the SAFE Banking Act and the potential rescheduling of marijuana, benefit US operators the most.
Ayr Wellness Inc. (CSE:AYR.A, OTCQX:AYRWF) had the strongest returns last week, up 89.9% over the four-day trading week and up 233.7% since the market opened on August 30, the date news broke of the rescheduling recommendation.
Columbia Care Inc (CSE:CCHW, OTCQX:CCHWF, NEO:CCHW) added 52.6% last week and 173.8% since August 30, and TerrAscend Corp. (CSE:TER, OTCQX:TRSSF) added 7.9% last week but is one of the strongest year-to-date performers, up 92.9%.
“This week, we had more investors ask to be added to our cannabis distribution list than in the last three months combined,” the analysts added.
Cannabis stocks continued to make gains on Monday morning, notably Canopy Growth Corporation (TSX:WEED, NYSE:CGC) and Aurora Cannabis Inc (TSX:ACB, NASDAQ:ACB) which had both added more than 40% at noon.
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