Shares of cannabis companies traded broadly higher Wednesday, as U.S. midterm elections helped usher in a green wave, with Michigan voting to legalize recreational pot and other states supporting medical marijuana.
The ETFMG Alternative Harvest exchange-traded fund
jumped 1.1%, with 31 of 37 components trading higher, putting it on track for a seventh straight gain. The sector tracker has now run up 18% during its win streak.
The Horizons Marijuana Life Sciences ETF
rallied 2.2%, also headed for a seven-day win streak.
Among the most-active stocks, Aurora Cannabis Inc.
rose 0.5%, Canopy Growth Corp.
slipped 1.1%, Cronos Group Inc.
eased 0.7%, Tilray Inc.
ran up 5.1% and MedMen Enterprises Inc.
tacked on 2.2%,
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 of Representatives 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 other pot stocks, shares of Toronto-based Namaste Technologies Inc.
gained 3.3% 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
rallied 4.2% 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
rallied 2.9%, Aleafia Health Inc.
fell 8.2%, Green Organic Dutchman Holdings Ltd.
shed 4.7%, Hexo Corp.
edged up 0.3% and Supreme Cannabis Co. Inc.
The ETFMG ETF has now run up 30% over the past three months and the Horizons ETF has soared 36%, while the SP 500 index
has lost 2.4%.
“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,” GMP’s Fagan wrote.
Check out: MarketWatch’s comprehensive coverage of the cannabis sector, including profiles of a number of key players, in one place.
Tomi Kilgore is MarketWatch’s deputy investing and corporate news editor and is based in New York. You can follow him on Twitter @TomiKilgore.
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