Are you looking for penny stocks to buy now? If you are, then you’re likely on the hunt for clear trends. Whether it’s breakout stocks to watch or specific industry momentum, knowing what’s happening in the stock market today is key. That brings us to marijuana stocks and related penny stocks to watch.
Why Are Marijuana Stocks Up Today?
The Secure and Fair Enforcement (SAFE) Banking Act is expected to advance to the Senate floor. It was introduced by a bipartisan group of senators. These include Sens. Jeff Merkley, Steve Daines, Kyrsten Sinema, Cynthia Lummis, and Majority Leader Chuck Schumer. The bill aims to establish a safe harbor for financial institutions serving legal marijuana businesses.
Key Points of SAFE:
- The SAFE Banking Act seeks to provide legal protection to banks and other financial institutions. It will offer services to state-legal marijuana businesses.
- The bill is designed to help legal cannabis businesses access traditional financial institutions for services. That includes bank accounts and small business loans.
- The Senate Banking Committee is expected to mark up the bill. It is also anticipated to advance to the full chamber’s floor.
- The legislation aims to make communities and small businesses safer by reducing the reliance on cash transactions. All-cash transactions can lead to robbery, money laundering, and organized crime.
- The marijuana sector has faced challenges in scaling due to its classification as a Schedule I substance. Furthermore, federal prohibition has limited access to financing and broader markets.
- Combined U.S. medical and recreational cannabis sales are projected to reach $33.6 billion by the end of 2023 according to MJBizDaily.
- The bill has stricter requirements for federal regulators. It prohibits them from terminating marijuana-related accounts without a valid reason or denying banking services based on personal beliefs or political motivations.
- An earlier version of the bill, the SAFE Banking Act, passed in the House seven times but never advanced through the Senate. The current bill may face challenges if it reaches the GOP-controlled House.
Marijuana Penny Stocks: A Clear Opportunity Or Just More Speculation?
This legislation represents a significant step for the marijuana industry. It addresses the financial constraints faced by legal cannabis businesses and aims to enhance safety by reducing cash transactions. But, like previous versions of SAFE, does it stand a chance? There have been plenty of “sell the news” events surrounding this “watershed” event.
However, it has resulted in more of an empty bucket for those hopeful of its passage and resulting industry boom. Needless to say, it hasn’t stopped the speculative boon in marijuana stocks this week. Today we look at a handful of marijuana penny stocks to watch amid this latest upswing.
Another “Sell The News” Event For Pot Stocks?
If you look at the trend in the stock market today with broad sector ETFs like MSOS and MJ, you may have been excited at the open. That’s likely because shares of both the AdvisorShares Pure US Cannabis ETF (NYSEARCA: MSOS) and the ETFMG Alternative Harvest ETF (NYSEARCA: MJ) shot higher during the first hour of the day. MSOS tested highs of $8.80, up from its previous close of $8.09. Meanwhile, the MJ ETF briefly broke above the $4 level on above-average volume.
Some of the industry’s heavyweight stocks by popularity also surged higher. Tilray (NASDAQ: TLRY) popped back above $2.60, Canopy Growth (NASDAQ: CGC) put in a high above $1, and SNDL Inc. (NASDAQ: SNDL) jumped above $2.
Shortly after the surge in momentum and pop to highs, selling ensued. Many sector stocks and ETFs broke down and as of 11:13 AM ET were hovering around intra-day lows. It also coincides with news from @SenateBanking, Senate Banking, Housing, & Urban Affairs Committee Majority Chairman Sen Sherrod Brown:
NEW: the SAFER Banking Act has passed the Committee with a bipartisan majority. Let’s get this bill to the floor to protect small businesses in the cannabis industry.
Hope For Marijuana Stocks?
Is there still hope for marijuana penny stocks? Most supporters of SAFE think so and despite today’s sell-the-news event, pot stocks are still trading in the green for the year. Not so much the MJ ETF but MSOS stocks are trading in the green for now. The ETF is up year-to-date and its heaviest weighting, which is in Green Thumb Industries (OTCMKTS: GTBIF), is up more than 30% year-to-date.
If SAFE doesn’t become the law of the land might put a dent in the run in pot stocks in 2023. However, it isn’t something that hasn’t been seen before and growing support for de-scheduling cannabis remains a prominent focus for many heading into another election year.