Wednesday brought a lull for the stock market, as Wall Street consolidated its gains following extremely strong gains on Monday and Tuesday. As of just before noon EST, the Dow Jones Industrial Average (DJINDICES:^DJI) was down 38 points to 30,649. The S&P 500 (SNPINDEX:^GSPC) rose six points to 3,832, and the Nasdaq Composite (NASDAQINDEX:^IXIC) moved higher by 28 points to 13,640.
In general, the action in the stock market was relatively quiet. But that was definitely not the case for marijuana stocks…
which posted some amazing gains. Let’s look more closely at the cannabis industry and what caused investors to be so bullish on Wednesday.
Big gains for big pot stocks
The industry’s leaders saw impressive gains in their share prices. Aurora Cannabis (NYSE:ACB) was higher by 8%, while Canopy Growth (NASDAQ:CGC) weighed in with a 6% gain. Cronos Group (NASDAQ:CRON) fared even better, rising 9%. Topping the list of top stocks were Tilray (NASDAQ:TLRY), up 16%, and Aphria (NASDAQ:APHA), climbing 15%, as the two prepare to merge.
Excitement in the space was prompted, in part, by some merger and acquisition activity. Jazz Phamaceuticals (NASDAQ:JAZZ) announced that it would acquire cannabinoid drug specialist GW Pharmaceuticals (NASDAQ:GWPH) in a deal worth $7.2 billion. According to the terms of the deal, GW investors will receive $220 per share in cash, and that sent GW stock higher by 46%.
Some industry followers hope that the trend toward consolidation will continue. Investors have been pleased at the prospects of the Tilray-Aphria combination, which would create the largest cannabis company by revenue. Other big players could benefit from synergies, and having fewer major players could reduce competitive pressures and improve pricing power.
Marijuana gets a little help from its friends — in Washington
Meanwhile, another source of the pot-stock push came from legislators in Congress. Senate majority leader Chuck Schumer (D-N.Y.) and other lawmakers announced earlier this week that they would spearhead efforts to jump-start cannabis reform early in 2021. The move follows through on expectations that many marijuana investors had when control of the Senate changed hands following the most recent national elections.
The priority for most pot stocks would be to…
Continue reading at THE MOTLEY FOOL