Business

Cannabis stocks surge as US midterm elections, Jeff Sessions resignation bolster hopes for a green wave


Shares of cannabis companies traded broadly higher Wednesday, as U.S. midterm elections are likely to usher in a green wave, with Michigan voting to legalize recreational pot and other states supporting medical marijuana likely just the beginning.

The sector got a further boost after long-time cannabis opponent Attorney General Jeff Sessions resigned “at the request” of President Trump.

The ETFMG Alternative Harvest exchange-traded fund

MJ, +7.06%

shot up 6.2% in late-afternoon, with 33 of 37 components trading higher, putting it on track for a seventh straight gain. The sector tracker has now run up 25% during its win streak.

The Horizons Marijuana Life Sciences ETF

HMMJ, +8.13%

ran up 5.3%, also headed for a seven-day win streak.

Among the most-active stocks, Aurora Cannabis Inc.

ACB, +9.19%

hiked up 6.4%, Canopy Growth Corp.

CGC, +8.17%

tacked on 6.0%, Cronos Group Inc.

CRON, +8.40%

surged 8.4% and Tilray Inc.

TLRY, +30.64%

soared 31%.

Jeff Sessions resignation, coupled with a Democrat-controlled House of Representatives, could prove a boon for the pot industry in the U.S. It was Sessions who rescinded an Obama-era policy used as protection for states that have legalized marijuana.

Don’t miss: Jeff Sessions have delivered a blow to the marijuana industry’s ability to raise capital.

Also read: For Canadia marijuana investors, coming to the U.S. is a ‘crapshoot’ that can end in a lifetime ban.

After Tuesday’s midterm elections, Michigan became the 10th state — and the District of Columbia — which voted to legalize marijuana. Although South Dakota voted down a measure to legalize pot, Missouri and Utah voters supported legalizing it for medicinal use.

But that’s not all. Democrats winning a majority in the House for the first time since cannabis liberalization began marks “a fundamental shift in the U.S. legislative landscape which could usher in a period of positive cannabis reform,” GMP Securities analyst Robert Fagan wrote in a note to clients.

“For instance, Dems will now gain majority control of the powerful House Rules Committee, which previously acted as a dogged gatekeeper of positive cannabis reform for the past 2 years under the oversight of anti-cannabis Republican Pete Sessions,” Fagan wrote, with Sessions losing his House seat from Texas to Democrat Colin Allred.

Don’t miss: Opinion: Marijuana wins in the midterm elections, but the biggest prize is still ahead.

“In our view, these midterm results combined with a strong pipeline of upcoming catalysts should serve to drive a decoupling of valuation multiples for the U.S. cannabis sector to eventually reach a premium over Canadian LP peers,” Fagan wrote.

Canaccord Genuity analyst Bobby Burleson said he believes Michigan is a “particularly important market” given the state’s population. He estimates Michigan’s marijuana market to grow from a value of about $856 million in 2018 to $1.3 billion in 2022.

Gubernatorial wins by a pro-cannabis candidate in Illinois and by the first Democrat in Nevada since 1994 should be viewed as wins for U.S.-based cannabis companies.

Among U.S. companies poised to benefit from Illinois and Nevada results, according to Burleson, shares of MedMen Enterprises Inc.

MMNFF, +5.79%

rallied 7.8% and Planet 13 Holdings Inc

PLNHF, +6.90%

ran up 9.0%.

In other pot stocks, shares of Toronto-based Namaste Technologies Inc.

NXTTF, +4.90%

gained 5.7% after the company said its Cannmart Inc. subsidiary signed an agreement with AgMedica Bioscience Inc. to buy medical cannabis from AgMedica to sell on Cannmart’s online platform. AgMedica is a licensed producer of medical cannabis under the Access to Cannabis for Medical Purposes Regulations (ACMPR), which holds cultivation and sales licenses.

MariMed Inc.’s stock

MRMD, +4.17%

climbed 7.8% after the Massachusetts-based manager of cannabis facilities said it named Charles Finnie, most recently a senior research analyst at Roth Capital Partners, its chief strategy officer, to head up its merger-and-acquisitions, investment and investors relations strategies.

Also read: Everything you need to know about CBD, the cannabis elixir that doesn’t get you high.

Elsewhere, shares of GW Pharmaceuticals PLC

GWPH, +5.65%

gained 6.3%, Aleafia Health Inc.

ALEAF, -5.54%

fell 1.7%, Green Organic Dutchman Holdings Ltd.

TGODF, +1.42%

slipped 0.6%, Hexo Corp.

HYYDF, +3.85%

advanced 2.7% and Supreme Cannabis Co. Inc.

SPRWF, +4.96%

advanced 5.7%.

The ETFMG ETF has now run up 37% over the past three months and the Horizons ETF has soared 40%, while the S&P 500 index

SPX, +2.12%

has lost 1.8%.

Check out: MarketWatch’s comprehensive coverage of the cannabis sector, including profiles of a number of key players, in one place.

Let’s block ads! (Why?)



Source link

Related posts

Florida sues Walgreens, CVS over opioid sales

admin

What Amazon's HQ2 means for taxpayers in New York and Virginia

admin

Florida sues Walgreens, CVS in connection with opioid crisis

admin

Leave a Comment