Shares of marijuana firms rose on Thursday right after a U.S. congressional committee passed a legislation to decriminalize cannabis, taking it a step closer to becoming authorized by the Democratic-controlled Property of Representatives.

The bill, which was passed 24 to 10 in the Property Judiciary Committee on Wednesday, sent shares of Canopy Growth , Aurora Cannabis , Aphria Inc and Tilray Inc up in between eight% and 15%.

“We feel federal legalization would be a major constructive for investor sentiment surrounding cannabis equities, which have been battered by oversupply and a steep value decline for the underlying commodity considering that becoming legal in Canada,” stated Garrett Nelson, senior equity analyst at CFRA Investigation.

The approval comes two months right after the Property passed a bill to advance legislation that would permit banks to offer solutions to cannabis firms in states exactly where it is legal.

The most current bill, which has a lot more than 50 co-sponsors, enables states to set their personal policies even though permitting to expunge federal marijuana convictions and arrests.

Furthermore, the bill will authorize a five% federal sales tax on marijuana goods that are manufactured in or imported into the United States.

On the other hand, analysts have been skeptical about the future of the bill.

“It’s such an early step in a extended approach that there are no close to-term implications for cannabis stocks. The Senate is not most likely to approve it, even if the Property have been to do so,” stated Alan Brochstein, managing companion at New Cannabis Ventures.

Shares in the sector are down a lot more than 25% this year, according to the option harvest ETF , which tracks cannabis-associated stocks, taking a blow from a slow roll out of retail shops and oversupply in Canada, as nicely as uncertainties associated to U.S. regulations.

Weed firms have been spending heavily to expand and strike partnerships in the United States, banking on a lot more states legalizing cannabis for each recreational and health-related use.

At the moment, 11 U.S. states have legalized marijuana for recreational use, even though 33 states have authorized it for health-related purposes.