Curaleaf Stock Skyrockets 15% in a Single Day—Here’s Why

Monday's trading session sent Curaleaf shares soaring—a 15% surge that left traders scrambling for answers. Was it a short squeeze? Sector momentum? Or just Wall Street catching up to cannabis hype?

The catalyst: Smoke signals from regulators?

While the original data didn't specify, double-digit jumps in weed stocks typically mean one thing: renewed optimism about federal legalization. Either that, or another hedge fund discovered the 'buy' button after three margaritas.

Market mechanics at play

Remember—this is an industry where 15% moves count as 'Tuesday.' But when a major player like Curaleaf pops, it drags the entire sector along for the ride. The question is whether this rally has legs—or if it's just another puff of smoke.

Drug of choice

The first news item producing that buzz was research published by the influential American Medical Association (AMA). In its Journal of the American Medical Association, the AMA detailed research from a survey that evaluated a clutch of drugs for how they affected eating disorders.

Image source: Getty Images.

Of the numerous drugs tested, the Journal noted, cannabis and psychedelic compounds were the highest-rated for alleviating symptoms of eating disorders. On top of that, marijuana and the psychedelics LSD and psilocybin also performed well in terms of overall mental health.

These contrasted with the generally weak showing of nicotine and alcohol, which the Journal said were frequently ranked by the respondents as being the most harmful substances.

Marijuana is legally sold as a medicine to qualifying patients in most U.S. states. If the drug can indeed treat eating disorders, this could dramatically enhance its appeal as a medical drug.

Pot lobbying

Another item of interest was Federal Election Commission (FEC) filings cited by several media outlets revealing that a pot industry-supported political action committee (PAC) made a meaty donation to President Trump's MAGA Inc. This is a so-called "super PAC" entitled to raise unlimited amounts of money to support political figures.

The American Rights and Reform PAC, fueled by donations from marijuana companies, has donated $1 million to MAGA Inc. Although that's relatively small given the over $177 million the latter absorbed in the first six months of the year, this does indicate that the weed industry is actively lobbying influential people in U.S. politics.