Marijuana stocks are closing out the week on a strong note Friday, with shares of Cronos Group (NASDAQ: CRON) up a solid 5% through 10:50 a.m. ET, and Tilray Brands (NASDAQ: TLRY) and Canopy Growth (NASDAQ: CGC) doing even better — up 11.8% and 26.6%, respectively.

U.S. news is part of the reason for investors’ renewed enthusiasm for cannabis stocks — earlier this week, Vice President Kamala Harris spoke approvingly of administration efforts to reduce federal regulation of marijuana. But arguably more important for marijuana investors is what’s happening right now in Germany.

United States of Marijuana

Steve Symington wrote about the U.S. aspect of this story earlier this week, after Harris told reporters it’s time for the United States “to legalize marijuana,” and that the first step toward doing so is to reschedule the drug from a Schedule I narcotic to a less dangerous Schedule III controlled substance instead — as the U.S. Department of Health and Human Services recommended doing last year.

That statement alone helps explain why shares of Cronos stock are up 20% already this week, and Tilray stock is up 27%. (Canopy Growth has some other things of its own going on this week, notably a move to set up a Canopy USA holding company to capitalize on any quick legalization of marijuana in America, which has helped push its stock up 91%!)

But whether or not marijuana gets legalized in the U.S. in the near future, there’s another country where this is all but guaranteed to happen: Germany.

What’s happening in Germany

As marijuana news source Marijuana Moment reports today, Germany recently passed a law that will fully legalize the drug in that country.

Up until now, it’s been an open question when exactly the law would take effect. But on Friday, German legislators declined to take a legislative step that would have delayed implementation of the law by six months. As a result, marijuana is set to become legal in Germany on April 1 — legalizing marijuana possession, home growing, and also distribution among members of “social clubs.”

Or as German Federal Health Minister Karl Lauterbach put it today: “Legalization of cannabis will arrive on Easter Monday!”

For investors in cannabis stocks such as Tilray, Cronos, and Canopy Growth, that news alone sounds pretty good. Even better will be when the second stage of marijuana legalization happens, and Germany passes laws to standardize commercial production and retail sale of cannabis in the country.

Right now, Tilray probably stands in the best position to capitalize on that future development. It already generates approximately 45% of its annual revenue ($285 million) from the Europe, Middle East, and African region that includes Germany. Canopy Growth, with 12% of its revenue coming from Germany in particular, will also benefit from this development, while Cronos is less likely to benefit. According to data from S&P Global Market Intelligence, nearly 99% of Cronos’ revenue come from just two countries — Canada and Israel.

So if you’re wondering why Tilray and Canopy Growth stocks are doing so much better than Cronos stock today, well, right there’s your reason.

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Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends Tilray Brands. The Motley Fool has a disclosure policy.

Why Tilray, Cronos, and Canopy Growth Stocks All Popped Today was originally published by The Motley Fool

Source: finance.yahoo.com