Pot shares rebound after election
Restrictions on medical, recreational sales lifted in five U.S. states
Cannabis companies rallied on Thursday, reversing a slump the day before, on renewed optimism restrictions of on marijuana sales in five states this week.
Aurora Cannabis Inc., Tilray Inc. and Aphria Inc. led the advance, with double-digit gains. Aurora shares rose as much as 16 per cent, while Tilray advanced 19 per cent. Shares in
Aphria, which operates mainly in Canada, rose 12 per cent after the company said it plans to buy a craft brewing company to expand into the U.S. ahead of a potential move to legalize.
The ETFMG Alternative Harvest exchange-traded fund, or MJ, climbed 6.1 per cent to the highest since Oct. 12 after closing down 3.1 per cent on Wednesday. The gains follow ballot passages in Arizona, Mississippi, Montana, New Jersey, and South Dakota, which will now add to the 44 states that allow marijuana for medical or recreational purposes.
It’s still a far cry from the vaunted industry hopes that sent the fund to record highs in September 2018. MJ has lost more than 70 per cent of its value since then. Despite growing support for cannabis in the U.S., federal legislation for legalized pot may be off the table for now, particularly with the possibility of Republicans retaining control of the U.S. Senate.
A divided government however may bode well for the enactment of the Secure and Fair Enforcement Banking, or SAFE, Act, which would enable cannabis banking, senior policy analyst Jaret Seiberg at Cowen & Co wrote in a note.
“This is likely to become the primary focus for the cannabis industry. The downside is that the SAFE Act would not be needed if there was a sweep as Democrats would have legalized cannabis,” Seiberg wrote.
Boris Jordan, chairman of Curaleaf Holdings Inc., one of the largest cannabis companies, said on Wednesday the state passages were “a green landslide.”
Trulieve Cannabis Corp. CEO Kim Rivers said news Wednesday about reconvening the Senate to pass a stimulus bill by the nd of the year was more good news for the industry.