Cannabis Stocks Rally to Best Weekly Performance in 2024
Major cannabis equities surge on regulatory optimism and sector rotation as investors pile back into beaten-down marijuana names.
Cannabis stocks delivered their strongest weekly performance of 2024, with major operators posting double-digit gains as institutional money flows back into the sector. Tilray Brands (TLRY) led the charge with a 23% weekly surge, while Canopy Growth (CGC) and Aurora Cannabis (ACB) posted gains of 18% and 15% respectively. The rally marks a dramatic reversal for a sector that has languished near multi-year lows for most of 2024.
The catalyst appears to be renewed optimism around federal rescheduling progress, with the DEA's administrative review process entering its final stages. Industry sources indicate that Schedule III reclassification could materialize within the next 90 days, potentially unlocking 280E tax relief worth hundreds of millions in additional cash flow for U.S. operators. This regulatory tailwind comes as several major MSOs report improving state-level fundamentals and margin expansion despite federal headwinds.
Institutional positioning data reveals significant short covering activity across cannabis names, with aggregate short interest declining 12% week-over-week. The sector's oversold technical condition created a powder keg situation where any positive catalyst could trigger rapid price appreciation. Trading volumes spiked to 3x normal levels, suggesting both retail and institutional participation in the rally.
The performance divergence within cannabis remains stark, however. While Canadian LPs captured headlines with their percentage gains, U.S. MSOs like Curaleaf (CURLF) and Trulieve (TCNNF) posted more modest advances despite superior operational metrics. This reflects ongoing capital market constraints for U.S. operators, who remain locked out of major exchanges due to federal prohibition.
Looking ahead, the sustainability of this rally hinges on concrete regulatory progress rather than speculation. Cannabis stocks have experienced multiple false starts over the past two years, with rallies quickly fading absent fundamental catalysts. Current valuations remain attractive on a forward basis, with leading operators trading at significant discounts to traditional retail and CPG comparables, but investors demand execution on both regulatory reform and operational improvements to justify sustained multiple expansion.