U.S. and Canadian marijuana stocks rallied Wednesday, after results from two runoff elections in Georgia raised hopes that the Democrats would take control of the Senate, potentially allowing more room for greater cannabis reform.
In one of the runoffs, Democrat Raphael Warnock beat incumbent Republican rival Kelly Loeffler. The race between Democrat Jon Ossoff and Republican David Perdue was too close to call, although Ossoff held a narrow lead as of Wednesday. Ossoff early in the day claimed victory.
Canadian marijuana stocks jumped in early trading. Canopy Growth (CGC) leapt 14% in the stock market today. CGC stock had been rebounding off its 50-day line earlier in the week, presenting a potential buying opportunity. Canopy stock is now well above the 10-week line, hitting its highest levels since August 2019.
Among U.S. marijuana stocks, Acreage Holdings (OTC: ACRHF) raced 25% higher. Curaleaf (OTC: CURLF) added 11%. Cresco Labs (OTC: CRLBF) gained 8%.
Innovative Industrial Properties (IIPR), a profitable pot REIT, rose a fraction.
Marijuana Stocks Two-Month Rally
Marijuana stocks have made gains since November, after Democratic President-elect Joe Biden won the presidential election.
The House, which is controlled by Democrats, also passed the MORE Act in December. That bill would pull pot from U.S.’ list of controlled substances and decriminalize the plant on a federal level, and allow states to determine their own pot laws.
Marijuana stock analysts have remained cautious on the prospect for friendlier pot laws. And they have said that entry by Canada’s big producers into the U.S. wouldn’t necessarily happen quickly even with full legalization.
Legal pot producers across North America are also still losing money, and currently scaling back operations, after over-expanding. Growers in states that have legalized it and in Canada still face competition from the illicit market, where weed is cheaper.
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