Here’s why Tilray, SNDL, Cronos, and Aurora Cannabis are flying

Cannabis stocks are getting supercharged this year, with most of them beating the blue-chip indices like the S&P 500, Nasdaq 100, and the Dow Jones. Tilray Brands (TLRY) stock price soared by over 18% on Wednesday. It has surged by more than 23% this year.

Cannabis stocks have surged this year

Similarly, the SNDL share price soared by over 22% and has risen by over 52% this year. Cronos Group (CRON) stock soared by over 8% and by 37% this year. Also, Aurora Cannabis (ACB) jumped by 44% and by over 51% this year.

This performance means that weed stocks are some of the best-performing companies in Wall Street. The other notable categories are energy and industrial sectors.

Cannabis stocks have jumped because of the potential clarity in the industry. On Wednesday, Paul McCarthy, a former leader at Canopy Growth as the head of the Cannabis Council of Canada (CCC). That is a sign that he will continue lobbying for more friendly regulations in the US.

Tilray vs Cronos vs Aurora Cannabis vs SNDL

US cannabis banking bill

The main reason why cannabis stocks have soared is that the American Senate will consider passing a banking bill when the new session resumes. The bill has already passed in the House of Representatives but has stalled in the Senate.

Such a bill will have major implications for companies with a presence in the US. See, while most states have legalised weed, many mainstream banks do not accept these companies. That’s because cannabis is still illegal under federal law.

Therefore, even in states where weed is legal, many banks always avoid opening and operating these accounts. 

As a result, many of these companies opt to open accounts from smaller banks, which are usually ineffective and expensive. The WSJ recently cited a small week kiosk owner who is paying a monthly maintenance fee of $500. According to the report, it is also common for companies in the sector to move physical cash.

A cannabis banking bill will come at a time when the DEA is considering rescheduling cannabis from Schedule 3 to Schedule 1. Still, it is unclear whether this rescheduling will happen. In a letter this week, Senator Mitt Romney, James Risch, and Pete Ricketts warned that the rescheduling will violate international treaties.

Therefore, there is a risk that these stocks could see some volatility in the coming months. As I warned before, cannabis stocks tend to rise sharply when there are major news in the market. They will likely be highly volatile in the coming months.