Pot stocks rise after Georgia Senate runoffs

Cannabis stocks soared Wednesday following Democrats’ showing in the Georgia runoffs, with the potential for a Democratic Senate majority raising investors’ hopes for the decriminalization of marijuana.

Several cannabis stocks saw double-digit increases Wednesday, including a more than 19 percent increase for Tilray by midday and other large spikes for Canopy Growth, Cronos Group and Hexo Corp.

Other companies such as Aphria Inc. and Aurora Cannabis climbed by roughly 12 percent midday following the results of the Georgia Senate runoffs the previous night.

Democrat Raphael Warnock was projected to defeat Sen. Kelly Loeffler (R) in their runoff, while Jon Ossoff was leading Republican David Perdue, whose Senate term ended Sunday, in the other race.

Pot stocks have been on the rise since President-elect Joe Biden’s victory in November, with Aurora Cannabis almost doubling on Nov. 6 as it became clear he would win the election.

A Democratic sweep of the Georgia runoffs would put Democrats in control of the Senate, House and White House, raising the prospect for action on marijuana decriminalization and other issues.

“Given Democrat President-elect Joe Biden will take office later this month, and the House remains controlled by the Democrats – a Democratic sweep could clear the way for more progressive cannabis legislation to be passed,” said Aaron Grey of Alliance Global Partners.

Vice-President-elect Kamala Harris has supported the decriminalization of marijuana on a federal level.

There are 15 states that fully legalized pot and another 16 that have decriminalized it for nonmedical purposes. 

However, marijuana is still banned federally and is illegal to import from other countries or across state lines. A bill was passed in December in the House to decriminalize and tax cannabis, but the Senate blocked it. 

If Ossoff wins his race, the Democrats will have unilateral control of the government for the first time since 2011.