Weed stocks surged after a key piece of legislation was reintroduced in U.S. Congress that would open up banking services to the legal cannabis industry.

The Roundhill Cannabis ETF (WEED) is up as much as 14 per cent, its largest intraday jump in six months, after a bipartisan group of senators reintroduced the SAFE Banking act. The MJ PurePlay 100 Index, which includes 100 cannabis-related stocks, is up nearly 8 per cent.

The gains are led by Canopy Growth Corp., up 7 per cent, and Tilray Brands Inc., rising 11 per cent, in the biggest one-day gain since March for both companies. 

“Reintroduction of SAFE Banking, as well as the potential for a hearing, seemingly suggest a possible pathway for passage of the SAFE Banking Act this year,” Benjamin Salisbury of Height Commentary said in a note.

While an earlier version of SAFE has passed the House multiple times, it’s now gaining support in the Senate and may be nearing the 60 votes needed to pass. The act would allow legal cannabis companies to access banking and financial services they’ve been barred from because marijuana remains illegal at the federal level. The reintroduced legislation includes Community Development Financial Institutions and Minority Depository Institutions.

Last year, lawmakers tried and failed three times to bring the SAFE Act to a vote, weighing on pot stocks. The latest moves means that the bill is again on the table, and that there may soon be a Senate hearing that could create a path to a floor vote. 

After multiple failed attempts, investors may remain skeptical that the legislation will ultimately go through, Jefferies analyst Owen Bennett said in a note. 

“We are optimistic this actually passes into law this year,” he said.