While Monday wasn’t the best day for the stock market overall, with major indexes seeing significant declines, there were a few sectors that did remarkably well overall. Cannabis stocks were some of the big winners on Monday, with shares of Aurora Cannabis (NYSE: ACB), in particular, surging by a double-digit margin. It turned out that much of this was in anticipation of the upcoming Georgia senate election, which could open the door to legalization across the country.
While the Senate run-off elections’ results won’t be decided until January 6th, cannabis speculators seem to be revving up in anticipation of the news. At the moment, Democrat candidate Jon Osoff is slightly up compared to his Republican rival, Sen. David Perdue.
This particular senate race is so important that it will decide which party will hold the Senate’s majority on Capitol Hill. It’s currently split 50-50 between the two parties, but a significant victory for either party will end up swinging things in that group’s favor. Should the Democrats win, it would open up the possibility of major cannabis legislation reform, while the opposite would smash the possibility of federal decriminalization of marijuana.
It’s this possibility that is sending pot stocks surging, something that will likely continue in the days leading up to the results. Investors should remember that pot stocks are especially volatile in relation to political news. Leading up to the national election between Trump and Biden, some of the biggest winners were cannabis companies. We’re seeing exactly the same thing right now leading up to this crucial senate race.
“A Democratic sweep makes Chuck Schumer the majority leader. That means there will be a vote of legislation. We expect Democrats to retain the fillbuster,” said cannabis analyst Vivien Azer in a note on Monday. She went on to add that if the Republicans can win just a single Senate seat, that will likely dash any hopes of country-wide legalization.
The biggest winner on Monday was Aurora Cannabis. Shares were up around 14.6% in anticipation. Once considered one of the top companies in the industry, Aurora has since plunged to a bottom barrel pick for many investors, given how cheap the stock is right now. As such, however, it’s also one of the most volatile companies on the market, with frequent price swings making a fortune for traders.
Other pot stocks, such as Tilray (NASDAQ: TLRY), Canopy Growth Corp (NYSE: CGC), and HEXO (NYSE: HEXO), were all up around 9.0%, 6.7%, and 9.6%, respectively. Most other cannabis companies were in the positive as well, although none rose as high as Aurora did.
Overall, expect a lot of volatility on Tuesday and Wednesday as traders anticipate the Georgia election results. It’s certainly going to be a big deal not just for politics but for the marijuana industry as well.
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
