Cronos Group

CA22717L1013

CRON

CRON

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 (-4 %) , 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 (-3,17 %) that is also reporting earnings on Monday before the open.

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