Cannabis stocks rallied for a second day Wednesday, buoyed by a historic congressional committee passage of a bill that aims to lift the federal ban on weed, as well as strong gains for Curaleaf after it posted a narrower-than-expected third-quarter loss.

Curaleaf’s U.S.-listed shares












CURLF, +15.36%











CURA, +15.62%










were last up 15%, as investors shrugged off its revenue miss.

The Massachusetts-based company posted a loss of $6.8 million, or a penny a share, versus losses of $33.7 million, or 9 cents a share in the year-ago period. Revenue rose to $61.8 million from $21.4 million. Analysts polled by FactSet had expected losses of 2 cents a share on revenue of $63.6 million.

GMP analyst Robert Fagan, who rates the stock a buy, said the numbers were “largely in line with our relatively high expectations.” The revenue number was below his estimate of $67 million.

He highlighted positives, including good cost control, a sequential rise in sales and that vaping fears had only a mue effect on Select’s sales in the quarter. The company acquired the Select brand in May for CS1.27 billion ($954.7 million).

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MKM analyst Bill Kirk raised his fair-value estimate on the stock to C$8 from C$6 but stuck with his neutral rating on the stock.

“Admittedly, after weak earnings reports for most of the sector, it feels nice to use positive numbers when talking about Curaleaf’s profitability,” the analyst wrote in a note. “However, we still can’t quite get there on valuation.”

Sentiment on Wednesday was boosted after the House Judiciary Committee voted in favor of the Marijuana Opportunity Reinvestment and Expungement (MORE) Act, which looks to remove the federal ban on cannabis and expunge past convictions.

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The bill, which is being introduced by Committee Chairman Jerrold Nadler, a New York Democrat, passed Wednesday by a 24-10 vote in favor.

“The Senate will take its own time, but then the Senate always does,” Nadler said at a press conference on Tuesday to introduce the bill. He also aimed to sound upbeat ahead of Wednesday’s markup session for the bill: “The energy and the political pressure from the various states is growing rapidly. The Senate is subject to that, too. We’ll accomplish this.”

Also read: House panel passes bill that aims to legalize marijuana, but top Democrat concedes ‘Senate will take its own time.’

In company news, Harvest Health & Recreation Inc.












HRVSF, +6.28%











HARV, +6.19%










became the latest cannabis company to scale back a previously agreed deal, its plan to buy cannabis licenses in Pennsylvania, Delaware, New Jersey and Maryland from CannaPharmacy Inc. in a deal originally priced at $88 million in cash.

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Instead, the companies have agreed that Harvest Health will acquire Franklin Labs LLC, a unit of CannaPharmacy, for $26 million that will be split between $15 million in cash and an $11 million promissory note.

Harvest Chief Executive Jason Vedadi said the new terms will help the company advance its revenue and profitability goals.

Cannabis stocks are still going through a period of retrenchment after a deep slump in stock prices. Many companies are revising deal terms, cutting costs and considering asset sales as the legal market is developing more slowly than expected and companies continue to post losses.

Harvest made the announcement as it posted a third-quarter loss of $39.1 million, or 14 cents a share, wider than the $453,000 loss posted in the year-earlier period. The company did not offer a per-share loss number for the year-earlier. Revenue rose to $33.2 million from $11.2 million. There are too few FactSet estimates to offer a reliable consensus.

In a similar move, Neptune Wellness Solutions Inc.












NEPT, +0.56%











NEPT, +0.00%










said Wednesday it has reached a mutual agreement with Canopy Growth Corp.












CGC, +15.63%











WEED, +15.85%










to amend and restate their cannabis-processing agreement. The parties have agreed to an amended schedule of processing volumes committed to Neptune by Canopy and to the removal of certain preferential rights granted Canopy related to Neptune’s capacity and pricing.

“Effective June 30, 2020, volume and pricing will be negotiated between the two parties based on market conditions,” Neptune said in a statement. The 3-year term of the deal remains intact. Neptune’s U.S.-listed shares were down 3.7%, while Canopy was up about 12%.

Elsewhere in the sector, Tilray












TLRY, +4.93%










was up 2.2%, Aphria Inc.












APHA, +4.76%











APHA, +5.63%










was up 3.1% and Cronos












CRON, +3.51%











CRON, +3.71%










climbed 1.8%.

Aleafia Health












ALEAF, +6.81%











ALEF, +4.41%










was up 9.8%, Hexo












HEXO, +5.49%











HEXO, +4.08%










was up 5.9% and Organigram












OGI, +7.11%










was up 5.6%.

MedMen












MMNFF, +5.38%










rallied 5.2%. GW Pharma












GWPH, -3.53%










was down 3.0%.

The ETFMG Alternative Harvest ETF












MJ, +3.46%










was up 2.1%, with 25 of its 36 constituents trading higher. The Horizons Marijuana Life Sciences ETF












HMMJ, +5.66%










was up 6.5%, with 42 of its 54 member stocks higher.

The S&P 500












SPX, -0.47%










dropped 0.8% and the Dow Jones Industrial Average












DJIA, -0.49%










was down 232 points, or 0.8%.

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