Cannabis stocks traded in a holding pattern on Thursday, extending a recent quiescent period, with investors awaiting the outcome of bipartisan legislation proposed in the House and Senate that would create protections for states that have legalized the substance for medical or recreational use.

“Cannabis stocks have been resting after a big run-up in the first two months of the year, “ said Korey Bauer, portfolio manager of the Cannabis Growth Fund

CANNX, -0.50%

a mutual fund recently launched by Foothill Capital Management. “People are looking to the next quarter and waiting to see what the next big partnership will be, that’s what will spark a resumed rally.”

The Strengthening the Tenth Amendment Through Entrusting States Act, or States Act, was introduced by Sens. Elizabeth Warren, Dem-Mass. and Cory Gardner, R-Colo. on Thursday, along with Reps. Earl Blumenauer, Dem-Oreg., and Dave Joyce, Rep-Ohio. The bill seeks to amend the federal law that continues to ban cannabis to include exemptions for businesses and individuals who comply with state laws.

Cannabis is still a Schedule 1 drug at the federal level, which classifies it alongside heroin and cocaine, preventing banks that are federally insured from offering services to companies in the sector.

The American Bankers Association sent letters to the House and Senate on Thursday in support of the bill.

Read also: Biggest-ever U.S. cannabis acquisition deal helps boost buying in marijuana sector

“While ABA does not take a position on the legalization of cannabis and the STATES Act is not a banking specific bill, removing the federal prohibition on cannabis in states that have legalized its use would allow banks to accept deposits and provide basic financial services to state licensed cannabis businesses and their service providers,” the letters said.

There has been a big spike in the number of cannabis companies tapping the debt markets, according to the latest data from Marijuana Business Daily and Viridian Capital Advisors. Cannabis companies conducted 33 debt raises in the first 13 weeks of the year, compared with just 19 in the year-ago period, Marijuana Business Daily reported.

Companies raised a total of $764.9 million in the period, up from $474.8 million a year ago. While the increase is partly due to the fact that more companies have entered the sector, companies are also turning to the debt markets to avoid equity financing that would require issuing more shares and diluting holdings.

Harvest Health and Recreation Inc.

HRVSF, -1.05%

 on Thursday announced the private placement of $500 million convertible bonds with plans to use the proceeds for general corporate purposes.

In the past week, Toronto-based Flower One Holdings Inc.

FLOOF, +1.21%

 which has operations in Nevada, closed aa C$50 million ($37.4 million) debt offering. Proceeds of that deal are to be used to pay down existing debt, for construction and development at the Nevada production facility and for general corporate purposes.

Among individual stocks, Aurora Cannabis Inc.

ACB, +0.22%

ACB, +0.17%

officials said they have hired investment banker Carey Squires as executive v.p. of corporate development and strategy, tasking him with global growth and partnership strategies. Squires most recently served as managing director and co-head of equity-linked capital markets for BMO Capital Markets, leading the financing for Aurora’s recent convertible debt offering among others.

German news site Handelsblatt reported that Aurora won five of 13 German domestic cultivation lots for medical cannabis, citing sector sources. Rival Canadian company Aphria Inc. also won five lots, with the remaining three going to Berlin-based Demecan, according to the site. Companies can grow 200 kg of cannabis a year, although the decision is preliminary and may change pending appeals by other applicants.

Jefferies analyst Owen Bennett said the news is positive for sentiment as the cultivation amounts are small and Dutch imports are likely to continue to supply the bulk of German patients.

“With Germany currently and projected to be the largest market outside of North America, it is seen by many as the bellwether for international operations, so success in this market is likely to be taken well,” Bennett wrote in a note. The news is slightly negative for Tilray Inc. and Canopy Growth Corp., which likely expected to win lots in the tender process, he said. Aurora shares were down 0.6% and Tilray shares were down 2.9%.

Canopy shares fell 0.6%. Constellation Brands Inc.

STZ, +6.54%

which has invested $4 billion in Canopy, reported quarterly earnings earlier Thursday and offered an outlook for fiscal 2020 that excluded dilution from that deal.

Elsewhere in the sector, Hexo Corp.

HEXO, -0.45%

was down 0.3%, Aleafia Health Inc.

ALEF, +1.06%

ALEF, +1.06%

was up 0.5%, and CannTrust Holdings Inc.

CTST, -1.47%

TRST, -1.31%

 was down 1.4%.

OrganiGram Holdings Inc.

OGRMF, -2.05%

was down 2.4%, MedMen Enterprises Inc.

MMNFF, +1.35%

 was up 3.3% and GW Pharmaceuticals PLC

GWPH, -2.02%

was down 3.5%.

Read: Tilray stock rises after the company shows it can sell recreational pot

Also: Cannabis stocks climb after Tilray’s earnings, as New Jersey moves closer to legal weed

The Horizons Marijuana Life Sciences ETF

HMMJ, -0.69%

was down 0.8%, and the ETFMG Alternative Harvest ETF

MJ, -0.11%

was down 0.7%.

The Dow Jones Industrial Average

DJIA, +0.64%

 was up 04% and the S&P 500 index

SPX, +0.21%

 was down 0.1%.

See also: In California’s Weed Country, wildfires burn both cash and crops

Cannabis Watch: All of MarketWatch’s coverage of cannabis companies

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