Weed stocks surge as Kamala Harris vows to decriminalize pot in debate
By Shariq Khan
(Reuters) - US-listed stocks of major cannabis producers rose sharply Thursday after Democratic Vice President Kamala Harris' candidate announced that marijuana would be decriminalized at the federal level in the US under a Biden administration.
During Wednesday night's debate with Vice President Mike Pence, Harris said she and Democratic presidential candidate Joe Biden would also clear the criminal records of individuals convicted of marijuana-related crimes in the past.
The cannabis stock tracker MJ ETF <MJ.P> rose 5.5% to mark its best session since early June, while Tilray Inc <TLRY.O> on the Nasdaq was up 19.2%. The US-listed shares of Canopy Growth Corp <WEED.TO>, Aphria Inc <APHA.TO> and Aurora Cannabis Inc <ACB.TO> closed between 10% and 13% higher.
Although many U.S. states have legalized the use of marijuana, banks and other traditional financial institutions have largely refused to partner with the industry because cannabis is still a classified substance at the federal level.
"Access to secure banking will transform the industry, free capital markets for investment, and reduce the risk of a cannabis business," said Keith Cich, co-founder of cannabis products maker Sunderstorm Inc.
Regulatory issues have also limited the availability of cash to emerging businesses at a time when they are struggling with a lack of profitability due to high costs.
"From a business perspective, (decriminalization) will level the playing field by allowing companies to incur normal operating costs instead of being taxed on gross profit," said Sam Armenia, vice president of C21 Investments Inc <CXXI.CD>.
Harris, who supported the decriminalization of cannabis even before Biden selected her as his fellow campaigner, is the main sponsor of the 2019 Marijuana Opportunity, Reinvestment and Expungement (MORE) Act, which aims to end the federal marijuana ban.
(Reporting by Shariq Khan in Bengaluru; editing by Shinjini Ganguli and Devika Syamnath)
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