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Marijuana Stocks Soar Amid Leaked Legalization Bill

Shares for Cannabis ETF, Curaleaf and Green Thumb Initiatives all soared significantly in the last two days

Cannabis stocks are soaring amid news of a Republican-led bill seeking to legalize and tax the substance at a federal level.

On Friday, online magazine Marijuana Moment broke the news that Rep. Nancy Mace (R-SC) is leading a bill to deschedule and tax marijuana. 

Currently in draft format, the bill known as the States Reform Act proposes officially making marijuana a regulated substance akin to alcohol and slapping it with a 3.75% excise tax.

While the bill is currently being circulated among stakeholders and not expected to be filed until the end of the month, the cannabis industry reacted swiftly. 

The change could mean significantly upturn to a market that is currently held back by differing state-by-state laws and inability to work with Canadian companies, which have exploded since the country legalized cannabis in 2019.

Cannabis ETF (THCX) ended up 7.9% to $12.83 while Green Thumb Industries (GTBIF), Chicago, Ill., finished up 5.6% at $22.25.  Medical marijuana operator Curaleaf (CURLF), of Wakefield, Mass., saw its stock gain 2.6% to $10.32, paring earlier gains. 

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Trulieve  (TCNNF) - Get Trulieve Cannabis Corp. Report shares finished up 2.9% at $28.82. 

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Many Canadian cannabis companies also reacted to the news. Tilray (TLRY) saw is U.S.-listed shares rise 15.6% to $12.37.  Canopy Growth Corporation (CGC) of Smith Falls, Ont., saw its U.S.-listed shares finish up 10.1% at $12.98. As TheStreet reported this morning, analysts at Cowen downgraded it to market perform from outperform and lowered its price target. 

Another Canadian company, Hexo Corporation (HEXO), based in Gatineau, Quebec, saw its U.S.-listed shares end up 13% at $1.57.

Cantor Fitzgerald analyst Pablo Zuanic told MarketWatch that this type of bill "significantly increases the probability of federal level marijuana reform," which, in turn, can lead to major reverberations on the market.