Senate Democrats plan to introduce a bill to decriminalize marijuana at the federal level next week, a person familiar with the matter said, although the legislation faces long odds in the evenly divided chamber.
Majority Leader Chuck Schumer worked with Senators Cory Booker of New Jersey and Ron Wyden of Oregon on the measure. The senators circulated a draft of the bill last year and made tweaks after feedback from Senate committees.
The Cannabis Administration and Opportunity Act would remove marijuana from the list of drugs covered by the Controlled Substances Act. States, however, can still maintain and create prohibitions on production and distribution of marijuana.
Pot stocks surged on the news. Canadian cannabis producer Tilray Brands Inc. soared as much as 20% in its biggest jump in four months. Investors surged into other Canadian licensed producers that have been expanding into the US market, including Canopy Growth which surged as much as 11%. US multi-state operators also rallied, with Green Thumb Industries climbing to its highest point in one month.
The sector has been pummeled this year as the glacial pace of US legalization weighs on formerly high-flying share prices. The ETFMG Alternative Harvest ETF, also known by the ticker MJ, has plunged 48% this year as investor hopes wane.
The legislation faces an uphill battle in the chamber where 60 votes are required to pass most bills. Many Republicans and some Democrats, including Senators Jeanne Shaheen and Jon Tester, have opposed decriminalizing marijuana.
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