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

Dion Rabouin, author of Markets
Expand chart
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

Go deeper

Alayna Treene, author of Sneak Peek
6 hours ago - Politics & Policy

Kellyanne Conway's parting power pointers

Kellyanne Conway addresses the 2020 Republican National Convention. Photo: Nicholas Kamm/AFP via Getty Images

Kellyanne Conway has seen power exercised as a pollster, campaign manager and senior counselor to President Trump. Now that his term in office has concluded, she shared her thoughts with Axios.

Why it matters: If there's a currency in this town, it's power, so we've asked several former Washington power brokers to share their best advice as a new administration and new Congress settle in.

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Alayna Treene, author of Sneak Peek
6 hours ago - Politics & Policy

GOP holdouts press on with plans to crush Cheney

Screenshot of emails to a member of Congress from individuals who signed an Americans for Limited Government petition against Rep. Liz Cheney. Photo obtained by Axios

Pro-Trump holdouts in the House are forging ahead with an uphill campaign to oust Rep. Liz Cheney as head of the chamber's Republican caucus even though Minority Leader Kevin McCarthy told them to back down.

Why it matters: What happens next will be a test of McCarthy's party control and the sincerity of his opposition to the movement. Cheney (R-Wyo.) is seen as a potential leadership rival to the California Republican.

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Lachlan Markay
6 hours ago - Politics & Policy

Democrats aim to punish House GOP for Capitol riot

Speaker Nancy Pelosi passes through a newly installed metal detector at the House floor entrance Thursday. Photo: Drew Angerer/Getty Images

House Democrats plan to take advantage of corporate efforts to cut funding for Republicans who opposed certifying the 2020 election results, with a plan to target vulnerable members in the pivotal 2022 midterms for their role in the Jan. 6 violence.

Why it matters: It's unclear whether the Democrats' strategy will manifest itself in ads or earned media in the targeted races or just be a stunt to raise money for themselves. But the Capitol violence will be central to the party's messaging as it seeks to maintain its narrow majorities in Congress.

Go deeper (1 min. read)Arrow