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Following sharp gains in recent days, cannabis stocks led by Canadian Licensed Producers fell Thursday even as a group of Senate Democrats introduced a much-awaited bill that would decriminalize cannabis at the federal level.
Senate Majority Leader Chuck Schumer (D-NY), Senate Finance Committee Chairman Ron Wyden (D-OR), and Sen. Cory Booker (D-NJ) filed the Cannabis Administration and Opportunity Act (CAOA) on Thursday after days of speculation.
Pot stocks climbed last week on the news of the imminent release of the bill and extended gains on Wednesday after the Senate Judiciary subcommittee chaired by Sen. Booker scheduled a hearing potentially to discuss its contents next week.
However, marijuana stocks, and Canadian LPs, in particular, are in the red as investors weigh the bill’s chances of passage through the Senate, where Democrats hold a slim majority.
Canopy Growth (NASDAQ:CGC), Aurora Cannabis (ACB), Hexo Corp (HEXO), and Global X Cannabis ETF (POTX), which went on to post double-digit gains over the past five days, are among notable decliners.
However, U.S. MSOs, including TerrAscend (OTCQX:TRSSF), Cresco Labs (OTCQX:CRLBF), Ayr Wellness (OTCQX:AYRWF), and the related ETF AdvisorShares Pure US Cannabis ETF (MSOS), are trading higher following modest gains.
MedMen Enterprises (OTCQB:MMNFF) is also trading sharply lower. In 2021, the company sold a majority of convertible notes to Tilray (TLRY), allowing the Canadian firm to build a significant stake in the MSO subject to federal legalization of cannabis.
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