This has been a big month for marijuana stocks. It began on election night, with the U.S. producing a green sweep. Five states had cannabis initiatives or amendments on their ballots for vote, and every single weed measure passed. Since California paved the way in 1996 as the first state to legalize medical marijuana, we’ve now witnessed…
35 additional states follow suit. Of these 36 legalized medical weed states, 15 also allow recreational consumption and/or sale.
Although it took a couple of extra days, we also witnessed Democratic Party challenger Joe Biden win the presidential race. This is noteworthy considering that Democrats have a much more favorable view of cannabis than Republicans — and it has the investment community excited.
Canadian pot stocks soar following U.S. election results
Interestingly enough, it wasn’t U.S. pot stocks that staged the biggest rally following the U.S. election. Rather, it was Canadian licensed producers (LPs) that’ve been blazing hot. In the three-day stretch following election night, here are some of the returns for Canada’s best-known producers:
- Aurora Cannabis (NYSE:ACB): up 99%
- Canopy Growth: up 15%
- Tilray: up 45%
- HEXO (NYSE:HEXO): up 40%
- OrganiGram Holdings: up 23%
- Cronos Group: up 24%
These gains imply there’s growing hope that the Biden administration will lead to the federal legalization of marijuana in the United States. Canadian LPs like Canopy Growth have pledged not to enter the U.S. until the federal government changes its stance on cannabis. Additionally, these companies would risk losing their U.S. listing status by engaging in the cannabis industry while it’s still federally illegal.
As some of you might recall, Vice President-Elect Kamala Harris was among a growing number of Democratic presidential candidates during the primary process who voiced clear support for federal marijuana legalization. Investors might be of the opinion that the incoming Vice President can sway policy toward legalization.
And, when in doubt, there’s always public opinion. In 2018 and 2019, national pollster Gallup found record-tying support (66% of survey-takers) for the nationwide legalization of pot.
The blunt truth about cannabis under the Biden administration
But what if I told you this hope was nothing more than an investor pipe dream?
President-Elect Joe Biden has been vocal about his past views on marijuana, but has stopped short of calling for legalization on numerous occasions. Instead, Biden would prefer to decriminalize weed in the U.S. and reschedule it. Currently, it’s classified as a Schedule I substance, meaning it has no recognized medical benefits and is wholly illicit. Biden’s proposal would move marijuana one rung lower on the controlled substances ladder (Schedule II). It would have…
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