Cannabis stocks were the best performing healthcare stocks last week, ahead of fresh legalization move

Marijuana players dominated top performers in healthcare this week ahead of a Republican-led attempt for federal legalization of cannabis in the U.S. Meanwhile, less than favorable quarterly earnings hurt decliners.

However, the healthcare stocks ended the week in positive territory with a ~0.6% gain to become the second-best performing sector in the S&P 500, narrowly beating the ~0.3% drop in the broader index.

Among stocks with more than $2B market capitalization and over 100K average daily volume over the past five sessions, Canopy Growth $11L1 surged the most with a 29.5% gain. Its local rivals, Aurora Cannabis $21P1 and Tilray $2HQ (+6.31%) , were not far behind, rising 27.6% and 20.9%, respectively to group among the top five performers.

The resurgence of cannabis players comes at a time the ETFs Global X Cannabis and AdvisorShares Pure US Cannabis remain sharply lower from their February peak and precedes the launch of a Republican bill on Monday to legalize marijuana at the federal level.

The proposed legislation led by Rep. Nancy Mace (R-SC) is said to have a softer regulatory approach compared to the bill introduced by Senate Majority Leader Chuck Schumer (D-N.Y.) in July, Bloomberg reported, citing people who have seen the draft.

Citing the recent underperformance of U.S. MSOs and the latest legislative move favoring the industry, Cantor Fitzgerald analyst Pablo Zuanic noted: “The tide will likely lift all boats.”

I am keeping an eye on $7CI (+2.19%) that is also reporting earnings on Monday before the open.

What do you guys think? Time to invest again in cannabis stocks?