Marijuana stocks were mixed Friday after the House passed a bill to decriminalize the drug for federal purposes and to move toward erasing past convictions.
The news didn’t help pot drugs much because it’s highly improbable that a Senate under GOP control will consider the bill.
Even if Democrats gain control of the Senate by winning Georgia’s two contests on Jan. 5, the bill might struggle to pass the Senate.
That’s because it’s questionable whether all Democrats would support it. Several Democratic senators are moderate to conservative.
Among the fund’s constituents, Aphria (APHA) - Get Aphria Inc Report traded at $8.56, up 1.7%; GW Pharmaceuticals (GWPH) - Get GW Pharmaceuticals Plc Report at $138.29, up 1.4%; Canopy Growth (CGC) - Get Canopy Growth Corporation Report was unchanged at $28.63; and Aurora Cannabis (ACB) - Get Aurora Cannabis Inc. Report traded at $10.87, down 3.3%.
The bill passed the House 228-164, with support from just five Republicans and one independent. Six Democrats voted no on the bill. The bill contained language to help legal marijuana businesses, including ones run by people of color.
A total of 15 states have legalized pot for recreational use, including Arizona, Montana, New Jersey and South Dakota in November’s election. And 36 states have OKd medical usage.
Morningstar analyst Kristoffer Inton puts fair value for Aphria at $11. But don’t get carried away.
“Although our base-case scenario assumes that Aphria will achieve economic profit generation by the end of our 10-year explicit forecast period, the probability of material value destruction for stakeholders currently remains too high to assign anything other than a no-moat rating,” he wrote last month.