Marijuana stocks glowed green again on Monday due to news of progress on marijuana banking reform in Congress. According to Senate Majority Leader Chuck Schumer (D-N.Y.), the Senate is on course to pass new cannabis banking rules in the not-too-distant future. And while we’ve heard this song before, investors are starting to hum along again anyway.
As of 10:35 a.m. ET, shares of Canopy Growth (NASDAQ: CGC) were up about 0.3%, Cronos Group (NASDAQ: CRON) shares had gained 1.7%, and Aurora Cannabis (NASDAQ: ACB) was doing best of all — up 6.5%.
Senators support marijuana banking reform
In an article on Friday, cannabis-focused news site Marijuana Moment described how the Secure And Fair Enforcement Regulation (SAFER) Banking Act has bipartisan Congressional support, and could be passed in the coming months. The House of Representatives has passed versions of this law seven times, but all have failed in the Senate. This time around, SAFER has passed a vote before the Senate Banking Committee and is ready for the full Senate. If passed, it would permit marijuana companies to take out loans and use other banking services, lowering their cost of doing business, possibly lowering costs for consumers — and improving profits for marijuana companies.
That already sounds like good news for investors, but it gets better. On Thursday, at an event sponsored by the National Cannabis Industry Association, Colorado Gov. Jared Polis predicted that SAFER will be part of a series of falling “dominoes” that includes rescheduling marijuana, and that will lead to marijuana legalization at the national level, reported another Marijuana Moment article.
Time to buy marijuana stocks?
Now, Polis may be right about that — or he may be wrong. The thing investors need to remember is that whether marijuana gets legalized federally this year or 10 years from now isn’t as important as how quickly marijuana companies can profit from it. Analysts think Aurora Cannabis is close to profitability, which could happen in 2026. Canopy Growth, however, might not earn a profit till 2028 while Cronos isn’t expected to ever turn profitable.
If you’re betting on marijuana legalization, Aurora Cannabis stock may be your best bet.
Should you invest $1,000 in Aurora Cannabis right now?
Before you buy stock in Aurora Cannabis, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Aurora Cannabis wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $539,230!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
See the 10 stocks »
*Stock Advisor returns as of April 8, 2024
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Why Canopy Growth, Cronos, and Aurora Cannabis Stocks Popped on Monday was originally published by The Motley Fool
Credit: Source link
