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Cannabis-Infused Beverage Stocks Rip Higher Amid Positive Farm Bill Development

Cannabis-Infused Beverage Stocks Rip Higher Amid Positive Farm Bill Development

A few U.S. cannabis stocks traded sharply higher Wednesday afternoon following a positive update on the upcoming farm bill.

What Happened

Sen. Pat Roberts, a Republican from Kansas who chairs the Senate Agriculture Committee, said the farm bill has made a big step forward. Even though the bill is far from being passed, the three other principal negotiatiors on the legislation have reached a tentative agreement.

Roberts didn't specify the details of the agreement. He only said it included a compromise over changes to the Supplemental Nutrition Assistance Program, also known as food stamps.

Why It's Important

The 2018 Farm Bill is an important piece of legislation that would reauthorize the country's $900 billion worth of food and agriculture programs for five years.

For the cannabis industry, specifically, the bill includes a provision regarding hemp. The 2018 Hemp Farming Act included in the bill would make CBD sales legal under U.S. federal law, allowing its sale in all 50 states. Hemp will also be declassified as a controlled substance, which will drive more investors into the hemp market.

The passage of the farm bill and the legalization of CBD and hemp could also attract some major companies to the industry. For months, there have been rumors giants such as The Coca-Cola Co (NYSE: KO) and Walmart Inc. (NYSE: WMT) might enter the CBD market if current uncertainties are removed.

Shares of New Age Beverages Corp (NASDAQ: NBEV) surged 23 percent Wednesday, while Pyxus International Inc (NYSE: PYX) and Youngevity International Inc (NASDAQ: YGYI) closed up 9.3 percent and 5.4 percent, respectively.

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What's Next

Congress missed a Sept. 30 deadline to pass the deal. Lawmakers must move quickly to get it done by the end of the year.

The committee is now waiting on analysis from the Congressional Budget Office for a final bill. Roberts expects the bill to be passed as a standalone piece of legislation instead of being attached to the spending bill that the Congress must pass in December in order to avoid shutdown.

Related Links:

Why You Should Be Careful With These Cannabis-Infused Beverage Stocks

Election Returns Likely To Usher In Hemp Amendment With Farm Bill

Posted-In: Cannabis-Infused BeveragesCannabis Government Regulations Markets Movers Media Trading Ideas Best of Benzinga


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