Weed Stocks Surge After Biden Victory

The outcome of the United States’ election proved highly beneficial for the cannabis sector, with industry stocks experiencing substantial increases driven by both the election results and recent financial reports. Businesses like Canopy Growth Corporation, Tilray, and Aurora Cannabis are witnessing a rise in their market value during pre-market trading as positive developments accumulate for the industry.

Several companies are demonstrating gains exceeding ten percent prior to the official market opening. As of this moment, Aurora Cannabis has increased by over 50%. This surge coincides with a global expansion of stock market indexes spurred by the announcement of a promising COVID-19 vaccine.

The latest earnings reports from Aurora Cannabis, Tilray, and Canopy Growth Corporation illustrate a sector undergoing transformation. Throughout the pandemic, these businesses observed a heightened interest in cannabis alongside necessary measures to decrease workforce expenses. While some firms reported losses in the most recent fiscal quarter, investors are evidently optimistic about future prospects.

To illustrate, Canopy Growth is currently up 10% in pre-market trading, and Tilray has risen by 25% in pre-market activity. Maintaining these levels upon market opening would equate to 2020 highs and replicate the gains cannabis stocks achieved following their initial public offerings in 2018.

The majority of cannabis companies are based in Canada, and the U.S. federal categorization of cannabis restricts these companies’ complete engagement with American consumers. This situation may be changing. Last week, cannabis legalization appeared on the ballots in five states and was approved in each election. Joe Biden was declared the winner of the presidential election on Saturday, and he has previously indicated his intention to pursue cannabis law reform.

The prospect of legal cannabis in the United States has never appeared stronger, and investors are clearly anticipating positive changes with a Democratic administration.

In the months ahead, Congress is scheduled to address several crucial cannabis-related matters, including enabling banks to collaborate with cannabis companies without the threat of federal repercussions (SAFE Banking Act). Another proposed law (The STATES Act) would permit states to legalize cannabis without federal interference. Furthermore, The MORE Act aims to remove cannabis from the federal Controlled Substance Act. Certain observers in Washington anticipate that the current Congress will consider these issues before the session concludes.