Cannabis stocks are soaring as U.S. House committee clears bill on federal weed legalization

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However, analysts were skeptical about the future of the bill

Shares of marijuana companies rose on Thursday after a U.S. congressional committee passed a legislation to decriminalize cannabis, taking it a step closer to being approved by the Democratic-controlled House of Representatives.

“We think federal legalization 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 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 authorize a 5 per cent federal sales tax on marijuana products that are manufactured in or imported into the United States.“It’s such an early step in a long process that there are no near-term implications for cannabis stocks.

 

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