Why Curaleaf Holdings Stock Rocketed Almost 20% Higher Today

Wednesday was one of the rare good days for the beleaguered marijuana industry, with stocks in the sector experiencing significant lifts. One weedie that saw quite the price gain on the day was multistate operator Curaleaf Holdings (OTC: CURLF), which booked a nearly 20% increase. That compared most favorably to the sleepy S&P 500 index's less than 0.2% improvement.

An official could make legalization official soon

To a great degree, the future success of Curaleaf and its peers depends on the development of marijuana legalization in this country. At the moment, federal officials are contemplating a proposed rescheduling of the drug, from its most hazardous Schedule I category to the far milder grouping of Schedule III. This would, for all intents and purposes, make the drug legal nationwide.

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That potential change seemed to gain significant momentum on Wednesday during a confirmation hearing before the U.S. Senate's Judiciary Committee. President Donald Trump's nominee to lead the Drug Enforcement Administration (DEA), Terrance Cole, stated that reviewing the proposal will be one of his top priorities upon arrival at the DEA, if confirmed by the legislative body.

Although marijuana advocates and cannabis company investors were excited when the proposal was first formally introduced, many have been frustrated by its slow progress up the legal ladder. Cole's remarks indicate that, at the very least, he'll prioritize the matter.

He didn't exactly commit, however

Marijuana company shareholders (and those now contemplating an investment in the sector) should be careful here, though.

Even though Senators from the committee pressed Cole on how he might approach rescheduling, he declined to commit to approving it. He told them that he needs "to understand more where [agencies] are and look at the science behind it and listen to the experts and really understand where they are in the process."

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.