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UPDATE: Cannabis stocks lifted by Dow's rally, hopes for bill that would protect states that have legalized weed
Today 1:16 PM ET (MarketWatch)
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By Ciara Linnane, MarketWatch

Cowen adds two new bankers to its cannabis team, Aurora becomes most popular trade on investment app Robinhood

Cannabis stocks rose Tuesday, buoyed by gains in the broader market and hopes for a bill that would block the Justice Department from interfering in states that have legalized weed for medical or recreational use.

The Dow Jones Industrial Average (http://www.marketwatch.com/story/dow-futures-rally-150-points-as-ecbs-draghi-hints-at-rate-cuts-ahead-of-fed-meeting-2019-06-18) rallied almost 400 points, or 1.5%, while the S&P 500 index was up 33 points, or 1.3%, after President Donald Trump tweeted that had a productive conversation with Chinese counterpart Xi Jinping. The news bolstered hopes for a resolution of the current trade conflict between the two nations.

Separately, ECB President Mario Draghi hinted at further eurozone stimulus (http://www.marketwatch.com/story/euro-drops-global-equities-rise-as-ecbs-draghi-hits-of-more-stimulus-2019-06-18)in comments that fueled hopes the Federal Reserve will signal its willingness to cut interest rates this year at a meeting due to start later Tuesday.

Against that background, the ETFMG Alternative Harvest ETF (MJ) rose 1%, with 24 of its 38 constituents gaining. The Horizons Marijuana Life Sciences ETF gained 1.1%, with 31 of its 55 constituent stocks posting gains.

The U.S. House Rules Committee will review an amendment later Tuesday to the fiscal 2020 Commerce-Justice Science spending bill that would prohibit the Justice Department from using any funds to interfere with cannabis programs in states that have legalized, as website Marijuana Business Daily reported (https://mjbizdaily.com/spending-bill-amendment-proposed-protect-state-legal-cannabis-programs/). The bill would only offer protection for a year and would not carry the broader powers contained in the Strengthening the Tenth Amendment Through Entrusting States (STATES) Act, which industry officials have been pushing.

The continuing U.S. federal ban on cannabis has complicated the effort to grow the sector, with banking a particular challenge. Banks that are federally insured cannot serve the industry without risk of an enforcement action, forcing companies to operate on a risky, cash-only basis.

For more, read:Push for legislation allowing banks to serve the cannabis business is gaining momentum (http://www.marketwatch.com/story/push-for-legislation-allowing-banks-to-serve-the-cannabis-business-is-gaining-momentum-2019-05-20)

Cowen Inc. (COWN) said early Tuesday it is adding two bankers to its New York cannabis team. Dan Schnurman, who was most recently at PricewaterhouseCoopers where he worked on strategic deals in the life sciences sector, will focus on advising medical cannabis clients and others interested in investing in the global sector. Townsend Zeibold, who was most recently at Cascadia Capital LLC, where he served as managing director for beverages and cannabis, will focus on M&A in the cannabis and beverages sectors. Cowen was one of the first U.S. banks to explore opportunities in the cannabis sector.

Cannabis Watch: For more of MarketWatch's coverage of the cannabis sector (http://www.marketwatch.com/storyno-meta-for-guid)


-Ciara Linnane; 415-439-6400; [e-mail]

(END) Dow Jones Newswires

June 18, 2019 13:16 ET (17:16 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.

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