Cronos Group, Canopy Growth, and Tilray all stock price gains on Tuesday
The mid-term elections on Tuesday were influential on marijuana investors long before the ballots were counted. The prospect of opening new recreational cannabis markets in two states and new medical markets in two other states caused marijuana stocks to surge on Tuesday.
The rally on election day helped several stocks recover from the significant dip the sector experienced following recreational legalization throughout Canada in October. Though Canada is now officially the second country after Uruguay to fully legalize the drug, the limited U.S. market is still expected to outperform its neighbor to the North.
Americans in four states headed to the polls yesterday to decide the fate of cannabis for medical or recreational use. Voters in Michigan and North Dakota weighed the legalization of cannabis for adults over age 21 while voters in Missouri and Utah decided whether patients should have access to marijuana as medicine.
The optimistic outlook for the measures in all four states caused leading stocks including Cronos Group, Canopy Growth, Tilray, Aphira, and Aurora Cannabis to rise. Cronos Group saw the highest Tuesday gain of 8.1 percent, followed by Canopy Growth at 6.15.
These same stocks all more than doubled in value in the two months leading up to legalization in Canada. According to Jon Trauben, a managing partner at Altitude Investment Management, companies that lead the way in Canada now will become international leaders in the coming years.
However, stock prices fell across the board following legalization. One advantage to the slow means to legalization that is occurring in across U.S. states is a less volatile stock exchange reaction.