Why Aurora Cannabis Stock Just Rocketed Higher
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If weed becomes legal, will Aurora Cannabis become profitable?Aurora Cannabis (ACB +15.60%) stock leapt 14.5% "higher" (get it? Marijuana? High?) through 11:55 a.m. ET Friday on some positive marijuana news out of the White House.
As The Washington Post reports, President Trump wants to legalize marijuana (sort of), and marijuana investors are overjoyed at the prospect. Image source: Getty Images. President Trump's Christmas gift to marijuana investors The Post cites six separate sources confirming that Trump will issue an executive order instructing the Justice Department to reclassify marijuana as a Schedule III drug (i.e., no longer Schedule I), and says this could happen as early as January. For weed aficionados who don't want to wait even that long, however, CNBC says the President could sign his order as early as Monday. What would this mean for investors in Aurora Cannabis? Well, rescheduling wouldn't legalize marijuana per se -- but it would make it a whole lot easier to do business in marijuana. A move from Schedules I to III would basically turn cannabis into a drug similar to "common prescription painkillers and other drugs" such as Tylenol with codeine, and dissociate weed from harder drugs such as heroin.Advertisement Banks would feel more comfortable extending loans to and taking deposits from marijuana businesses. They'd be able to deduct more expenses from their income taxes. All of this would tend to increase (legal) demand for the marijuana that Aurora Cannabis produces. ExpandNASDAQ: ACBAurora CannabisToday's Change(15.60%) $0.71Current Price$5.26Key Data PointsMarket Cap$0BDay's Range$4.91 - $5.5052wk Range$3.42 - $6.91Volume6.6MAvg Vol1.4MGross Margin-86.45%Dividend YieldN/A Is Aurora Cannabis stock a buy? Investors need to be aware, though, that simply rescheduling marijuana may not immediately turn Aurora Cannabis into a profitable stock. Marijuana has been legal in Aurora's home market of Canada since 2018, but the company still loses money most years. Marijuana investors should enjoy the momentum behind their stock today. Just... don't expect it to continue without some solid profits to support it.About the AuthorRich Smith is a contributing Motley Fool defense and stock market analyst covering publicly traded and emerging companies in defense, space, aerospace, and other sectors. Prior to The Motley Fool, Rich practiced international corporate law for Clifford Chance in Russia, and for the Russian-Ukrainian Legal Group in Moscow, Kyiv, and Washington, D.C. He holds a bachelor’s degree in international relations from the College of William & Mary, a law degree from the University of Baltimore, and a language certification from the International Institute of Russian Language & Culture in Tver, Russian Federation. The Globe and Mail once featured him as “one of the best stock pickers since 2009.”TMFDittyX@RichSmithFoolRead NextFeb 12, 2025 •By David Jagielski, CPAAurora Cannabis Skyrockets After Earnings: Should You Buy Into the Rally?Dec 19, 2024 •By George Budwell, PhDBetter Marijuana Stock: Aurora Cannabis or Tilray Brands?Oct 9, 2024 •By George Budwell, PhDIs It Time to Load Up on Aurora Cannabis Stock?Aug 24, 2024 •By David Jagielski, CPAPrediction: Aurora Cannabis Will Be Worth More Than Canopy Growth in 5 YearsAug 16, 2024 •By David Jagielski, CPAAurora Cannabis Had a Strong Q1, but Investors Should Expect a Slowdown in Future QuartersJul 25, 2024 •By Keith Speights1 Stock I Wouldn't Touch With a 10-Foot Pole