A well-connected House Democrat bought a large number of shares of cannabis stocks while pushing for decriminalization of the drug. According to a financial disclosure form, Rep. John Yarmuth bought $60,000 worth of cannabis stocks while publicly calling for decriminalization.
Democrat buys cannabis stocks while pushing decriminalization
Yarmuth is chair of the House Budget Committee. On Feb. 12, he bought $1,000 to $15,000 worth of shares each in Canopy Growth, Aurora Cannabis, Tilray and Cronos Group. He bought the shares a little more than two months after the House passed the Marijuana Opportunity Reinvestment and Expungement Act, which he co-sponsored in September. The bill seems to de-schedule and decriminalize marijuana. The Senate has yet to vote on the legislation.
A spokesperson told Fox Business that Yarmuth bought the cannabis stocks after four states legalized recreational cannabis in the November elections. They also said he was "transparent about it and followed all House Ethics and financial disclosure rules."
Members of Congress can purchase stocks, but the STOCK Act prohibits them from trading on non-public information.
Cannabis stocks continue to soar due to decriminalization efforts
Fox Business notes that shares of Cronos, Tilray, Aurora and Canopy Growth have all more than doubled year to date as momentum traders pushed them higher. Speculation that cannabis would be legalized at the federal level in the U.S. has been driving the shares. Democrats have been pushing for the legalization of pot, and since they have control of the White House, the Senate and the House of Representatives, it looks more likely that they will make good on their efforts.
However, Fox Business believes Yarmuth has lost money on his cannabis stocks despite his push for decriminalization. The news outlet notes that the four companies' shares were down between 6% and 20% since Feb. 11, which is the day before he bought them, through Wednesday.
Scrutiny of stock purchases increases
Scrutiny of lawmakers' stock purchases has increased amid the pandemic. House Speaker Nancy Pelosi's husband bought up to $1 billion worth of call options in Tesla in December, while then-President-Elect Joe Biden was working on his plans to fight climate change.
Four senators or their spouses sold stock just before the S&P 500 plunged 34% in February and March 2020. The Department of Justice started investigating whether they sold those shares based on non-public information that the pandemic was about to cause serious economic damage. However, the DoJ has since dropped its investigation.