The Election’s Impact on Cannabis Stocks
One in Three Americans Now Have Access to Legal Marijuana
On Tuesday, Arizona, New Jersey, Montana, and South Dakota legalized recreational marijuana sales to adults. These states joined Washington, D.C. and 11 other states where recreational sales of the drug are already legal. Additionally, Mississippi legalized the sale of medical marijuana on Election Day.
Though this was welcome news for investors in the cannabis industry, pot stocks fell as other election results came in Tuesday night. Marijuana investors were hoping that Democrats would regain control of the Senate, because a left-leaning Senate would be more likely to make changes to federal marijuana laws. Though ballots in some states are still being counted, it appears that the GOP will retain control of the Senate, which makes country-wide changes to cannabis laws in the near future unlikely, though not impossible.
The Impact on Stocks
One in three Americans now have access to legal marijuana. However, investors still seemed disappointed with Tuesday’s results, given that most major marijuana stocks tumbled.
Canadian marijuana stocks trading on US exchanges sank yesterday. Canopy Growth (CGC) ended the day down 7.14% on Wednesday, Aphira (APHA) dropped by 0.4%, and Aurora Cannabis (ACB) tumbled 9.78%.
Curaleaf (CURLF), the biggest US cannabis company, was down 1.52%. However, analysts expect the company to see growth from the newly passed legislation—especially in New Jersey and Arizona. Curaleaf already does recreational and medical marijuana business in 23 states. It has 95 dispensaries and 22 cultivation locations.
Voters Make Their Opinions Known
Given the newly passed laws, analysts expect legal revenue from cannabis sales in the US to hit $34 billion by 2025. This could be even higher if other states change their laws in the coming years.
Though changes to federal marijuana regulations may not happen as soon as investors hoped, yesterday’s results did send a clear message to lawmakers that voters are excited about marijuana legalization. This could put pressure on politicians on both sides of the aisle to relax regulations on marijuana.
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