Canadian cannabis companies got a shot in the arm on Wednesday as U.S. voters in three states decided to legalize the drug, and one of its biggest political opponents stepped down.
While much of the attention from Tuesday evening’s midterm election focused on the balance of power in Congress, investors were instead focusing on ballot initiatives to legalize recreational marijuana in Michigan and North Dakota, while allowing the drug for medical use in Utah and Missouri.
Both of the medical initiatives passed, as did Michigan’s, but voters in North Dakota decided to reject its recreational marijuana use. But the three other states going ahead mean that 33 U.S. states plus the District of Columbia currently allow for legal marijuana use under some circumstances — either medically or recreationally.
“Marijuana has now been legalized for adult use in one out of every five states, so I think it’s safe to say federal laws are in need of an update,” said Matthew Schweich, deputy director of the Marijuana Policy Project advocacy group.
Investors clearly thought the same thing, as shares in Canopy Growth Corp., Aurora Cannabis Inc. and Aphria Inc. rose by eight per cent, nine per cent and four per cent, respectively. Nanaimo, B.C.-based Tilray Inc., which trades its shares on the Nasdaq exchange in New York, closed up by more than 28 per cent.