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The SAFE Act's House passage isn't enough to rescue flailing pot stocks

Data: Investing.com; Chart: Axios Visuals

Marijuana advocates scored a big win Thursday with the passage of the SAFE Act through the U.S. House of Representatives, but the market was less enthusiastic.

What it means: The Secure and Fair Enforcement Banking Act would allow marijuana companies to more easily do business with federally insured banks in the U.S.

What happened: Marijuana stocks initially soared in after-hours trading Wednesday, with Aurora Cannabis gaining more than 5% and Canopy Growth jumping 4%, but those gains were short-lived.

  • Canopy Growth's stock rose a paltry 0.42% on Thursday, while Aurora Cannabis' stock fell 0.24%, as the bill's fate in the Senate and a signature from President Trump looked uncertain.

The big picture: Matt Hawkins, managing principal at Cresco Capital Partners, told Fortune yesterday he expects to see a “heavy influx” of cannabis-related IPO registrations on the Nasdaq and NYSE because the bill would further solidify the viability of the U.S. marijuana industry.

  • It raised nearly $13.8 billion in financing in 2018, according to industry advisory firm Viridian Capital Advisors, Fortune reported.
  • Most investments stemmed from legalization in Canada and legislative changes at the state level in the U.S., which gave investors more confidence in backing pot companies.

Reality check: Pot stocks are in need of some good news. It's been almost all downhill since March after a world-beating rally to start the year.

  • A popular marijuana industry ETF, ETFMG Alternative Harvest (MJ), is down more than 10% year to date and has fallen 30% this quarter.

Go deeper: Revenue from marijuana vaping products dips 15% amid health fears

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