While Thursday was a pretty good day for the stock market overall despite the continued uncertainty of the U.S. election, some stocks have done better than others. The biggest winner on Thursday is undoubtedly the cannabis sector as a whole, with most pot stocks rising as the prospect of a Biden victory seems all the more likely.
Biden and his Vice President have said that they are open to legalizing weed on a federal level, a move that would make him the most pro-pot president in history. For cannabis companies, this is big news and would make conducting business significantly easier for them, as well as no longer requiring to list on foreign stock exchanges. Many cannabis retailers have had difficulties with payment providers, given the legality of weed on a state versus federal level.
In anticipation of a Biden win, pot stocks are surging across the board. “I would say this was one of the best-case scenarios for cannabis investors,” said Korey Bauer, chief investment officer and portfolio manager of Foothill Capital Management. “A pure blue wave would be the ‘best case’ scenario but I guess we will find out soon enough when looking at the Senate.”
The biggest winner of them all, however, was Aurora Cannabis (NYCE: ACB), whose shares shot up by almost 40%. Aurora has been struggling for the past year, losing around 80% of its value so far in 2020. Its ongoing debt issues, billion-dollar goodwill adjustments, as well as its continued losses, have seen the once-famous pot stock tumble.
Despite its difficulties, Aurora has remained incredibly popular amongst millennials and younger investors. On Robinhood, Aurora Cannabis remains among the most popular, if not the most popular, stock on the trading app. Other pot stocks also remain highly popular among younger investors as well.
Another big winner is Tilray, whose stock is up around 30.3%. Canopy Growth and Aphria are both up around 10% following Thursday’s gains. Two more pot stocks, Cronos Group and Tilray, also reported their third-quarter results, both of which were better-than-expected. Cronos and Tilray used to be considered two of the most overvalued cannabis companies on the market, trading at remarkably high valuations. Even now, both companies are still on the pricier side.
Besides the Biden victory, four more states, including Arizona, New Jersey, Montana, and South Dakota, all voted to legalize adult-use cannabis. Another state, Mississippi, also approved the use of medical marijuana as well. At this moment, approximately one-third of all Americans live in states where cannabis is legal for adult use, a figure that is expected to continue growing in the future.
Overall, the outlook for the cannabis sector looks more positive now, despite what has been two solid years of underperformance and disappointments.
Aurora Cannabis Company Profile
Aurora Cannabis Inc., headquartered in Edmonton, Canada, cultivates and sells medicinal and recreational cannabis through a portfolio of brands that include Aurora, CanniMed, MedReleaf, and San Rafael ’71. Although the company primarily operates in Canada, Aurora has expanded internationally through medical cannabis exporting agreements or cultivation facilities in more than 25 countries. – Warrior Trading News
