ASX cannabis shares were once one of the hottest sectors with no shortage of new pot stocks hitting the market.
The Cann Group Ltd (ASX: CAN) share price, for example, skyrocketed almost 300% between September 2017 and January 2018 amid the federal government allowing medicinal cannabis exports and booming M&A deals taking place across the sector.
Unfortunately, money came out of this sector as fast as it went in.
Fast forward to today, most ASX cannabis shares sit around multi-year, if not all-time lows. It isn’t unusual to find players down 80-90% from their all-time highs.
Despite being beaten up and battered, these cannabis shares have managed to find somewhat of a floor in recent months.
While trading sideways for the past 1-2 months, this week has proven to be a small win for these beaten-up stocks.
The Cann Group share price is up 20.5% this week to a 3-month high of 34 cents.
Althea Group Holdings Ltd (ASX: AGH) is up 9.5% to a 2-month high of 29 cents.
Similarly, Ecofibre Ltd (ASX: EOF) is up 4.7% to a 4-month high of 89 cents.
Why ASX cannabis shares are bouncing higher?
ASX cannabis shares are likely taking off after a 7.1% jump in the Global X Cannabis Exchange Traded Fund (ETF) on Tuesday night.
The cannabis ETF invests in companies across the industry, involved in the legal production, growth and distribution of cannabis and industrial hemp.
Canadian and US-listed companies make up more than 90% of its allocation but the ETF does have a small allocation in Creso Pharma Ltd (ASX: CPH).
Last month, the Motley Fool US reported that a panel from the US House of Representatives is preparing for a vote to “federally legalise marijuana” outright.
This move will look to “decriminalise marijuana federally” in the US by removing it from the Controlled Substances Act.