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Data: FactSet; Chart: Axios Visuals

Cannabis companies continued to blaze higher on Wednesday, boosted by the announcement that mainstream sleep medications company Jazz Pharmaceuticals would acquire GW Pharmaceuticals, developer of Epidiolex, a marijuana-based drug that won FDA approval as a treatment for severe forms of childhood epilepsy in 2018.

By the numbers: U.K.-based GW Pharma shares jumped 46% and pot stocks rallied broadly, gaining on their already impressive 2021 surge.

  • Shares of Aphria gained 12.6% on the day.
  • Cronos rose 8.1%.
  • Tilray added 12%.

Be smart: "We don’t think this is the last deal we will see in the sector," Nawan Butt, portfolio manager of the Medical Cannabis and Wellness ETF CBD, told MarketWatch.

  • “It is also another example that the cannabis industry is continuing to normalize and evolve beyond the traditional cultivation of flower, with potential well outside of our borders,” Jason Wilson, cannabis and banking expert at ETF Managers Group, which manages the ETFMG Alternative Harvest ETF, said in the article.
  • “For investors, the acquisition of GW Pharma is another reminder that investing in cannabis touches many verticals globally, requiring a diverse approach beyond traditional cannabis cultivation companies.”

Go deeper: Pot stocks boom as industry sees prohibition ending

Go deeper

Dion Rabouin, author of Markets
Feb 3, 2021 - Economy & Business

Pot stocks boom as industry sees prohibition ending

Illustration: Aïda Amer/Axios

GameStop and the "meme" stocks have attracted much of the market's attention in recent weeks, but cannabis stocks have been the market's real standout in 2021 thanks to renewed expectations of U.S. legalization.

The big picture: Many have quietly doubled their stock price in less than a month of trading.

California governor declares drought emergency in most counties

A sign in April on the outskirts of Buttonwillow in California's Kern County, one of the top agriculture producing counties in the San Joaquin Valley, after historically low winter rainfall. Photo: Frederic J. Brown/AFP via Getty Images

California Gov. Gavin Newsom (D) extended a drought emergency declaration to cover 41 of the state's 58 counties on Monday.

Why it matters: Most of California and the American West are experiencing an "extreme" or "exceptional" drought, per the U.S. Drought Monitor. Newsom and other officials are concerned California could experience a repeat of the catastrophic 2020 wildfire season.

Pelosi's Republican playbook

Illustration: Aïda Amer/Axios

As Republicans fight among themselves, House Speaker Nancy Pelosi (D-Calif.) is showing the myriad ways she deals with the GOP herself.

Between the lines: We've seen Pelosi cut opponents off at the knees, like she did with President Trump, or pretend to forget their names, as she did to Sen. Ron Johnson (R-Wis.). Now she's feeding oppo research against her House counterpart, Minority Leader Kevin McCarthy (R-Calif.), so others can use the same harsh rhetoric to frame the Republicans as the party of dysfunction.