Will the Federal Weed Legalization Bill Pass in the Senate?

The long-awaited federal cannabis legalization bill has made its way to the Senate. If enough senators vote in its favor and Joe Biden accepts it, the Cannabis Administration and Opportunity Act would unlock significant opportunities for marijuana companies. What are the best cannabis stocks to buy ahead of the legalization bill’s vote?

Senate majority leader Chuck Schumer is leading the efforts to lift the ban on cannabis at the federal level. Whereas dozens of states have legalized pot in some form, it's still a prohibited substance federally.

The bill seeks to remove cannabis from the federal government's list of banned substances, proposes forgiving people convicted or arrested for petty cannabis-related cases, and aims to fund police departments to fight illicit pot cultivation. The bill also proposes a funding program through loans to small cannabis businesses.

The bill will require 60 votes to pass in the Senate, means it needs the backing of all Democrats and at least 10 Republicans. Although polls have shown that about two-thirds of Americans support weed legalization, lawmakers in Washington are divided on it.

Whereas Senate Democrats broadly support lifting the federal cannabis ban, many have voiced their opposition to Schumer’s legalization bill. The Democrat opposition to the bill puts it at risk of failing in the vote.

The bill's supporters aim to get it passed as soon as possible. Democrats backing the bill would like to have it voted on before the midterm elections, which could see them lose their majority in Congress. However, it's worth noting that even if the bill passes in the Senate, Biden may reject it. The president has long opposed pot legalization.

Business may boom for cannabis companies if the federal cannabis legalization bill passes in the Senate and Biden okays it. Some stocks to watch closely are the following:

• Tilray (TLRY) – This Canadian company grows and distributes weed for medical and recreational markets. In the most recent quarter, its sales increased more than 20 percent and its profit more than doubled. TLRY stock is more than 50 percent below its recent high.

• Canopy Growth (CGC) – This Canadian diversified cannabis company’s revenue fell about 25 percent in the most recent quarter, but its loss narrowed. CGC stock may appeal to bargain hunters, at 70 percent below its recent peak.
• Green Thumb Industries (GTBIF) – In the latest quarter, this American cannabis consumer packaged goods company saw its revenue increase by 25 percent and its profit soar almost 180 percent.