This was a very challenging year for pot stocks. Year-to-date, AdvisorShares Pure US Cannabis ETF (ARCA:MSOS) dropped 54.01%, AdvisorShares Pure Cannabis ETF (ARCA:YOLO) declined 57.46%, compared to SPDR S&P 500 (ARCA:SPY) which lost 13.61%.
Looking into some of the biggest cannabis players out there, the situation is pretty much the same. Since the beginning of the year Aurora Cannabis (NASDAQ: ACB) fell 75.57%, Tilray (NASDAQ: TLRY) plummeted 51.96%, Canopy Growth (NASDAQ: CGC) lost 70.29%, Cronos Group (NASDAQ: CRON) declined 24.17%.
Despite the harsh market conditions, reports that long-awaited legislation was finally introduced sent cannabis stocks soaring. The bill from Senate Majority Leader Chuck Schumer, Senators Ron Wyden and Cory Booker – the Cannabis Administration And Opportunity Act (CAOA) – was presented on July 21st. There’s no doubt that the passage of any of a number of cannabis-related reforms would have a similar effect on pot stocks. The question is – how long will the rally last?
What’s more, while many industry experts seem to concur that CAOA's chances of passing are slim. They see the SAFE Banking Act, which would allow for banking access to marijuana businesses, as more likely to reach the President’s desk. Securing Biden’s signature would doubtless have a historic impact on the industry, which consistently struggles with access to financial services.
But, then again…what if it doesn’t? What if none of the fundamental cannabis bills pass in the Senate? What would happen with cannabis stocks? What are other important parameters cannabis investors should keep their eye on aside from these federal …