Shares of marijuana companies rose on Thursday after a United States congressional committee passed a legislation to decriminalise cannabis, taking it 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 (WEED.TO), Aurora Cannabis (ACB.TO), Aphria Inc (APHA.TO) and Tilray Inc (TLRY.O) up between eight per cent and 15 per cent, Rueters reports.
"We think federal legalisation 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, which has more than 50 co-sponsors, enables states to set their own policies while allowing to expunge federal marijuana convictions and arrests.
Additionally, the bill will authorise a five per cent federal sales tax on marijuana products that are manufactured in or imported into the United States.