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Cannabis stocks surge as U.S. midterm elections, Jeff Sessions resignation bolster hopes for a green wave

Cannabis stocks surge as U.S. midterm elections, Jeff Sessions resignation bolster hopes for a green wave

Postby smix » Thu Nov 08, 2018 1:09 am

Cannabis stocks surge as U.S. midterm elections, Jeff Sessions resignation bolster hopes for a green wave
MarketWatch

URL: https://www.marketwatch.com/story/canna ... 2018-11-07
Category: Business
Published: November 7, 2018

Description: Marijuana sector heads for 7th straight gain, as Jeff Session’s resignation and House’s flip to Democrats drive optimism for U.S. companies
Shares of cannabis companies traded broadly higher Wednesday, as U.S. midterm elections are likely to usher in a green wave, with Michigan voting to legalize recreational pot and other states supporting medical marijuana likely just the beginning. The sector got a further boost after long-time cannabis opponent Attorney General Jeff Sessions resigned “at the request” of President Trump. The ETFMG Alternative Harvest exchange-traded fund shot up 6.2% in late-afternoon, with 33 of 37 components trading higher, putting it on track for a seventh straight gain. The sector tracker has now run up 25% during its win streak. The Horizons Marijuana Life Sciences ETF ran up 5.3%, also headed for a seven-day win streak. Among the most-active stocks, Aurora Cannabis Inc. hiked up 6.4%, Canopy Growth Corp. tacked on 6.0%, Cronos Group Inc. surged 8.4% and Tilray Inc. soared 31%. Jeff Sessions resignation, coupled with a Democrat-controlled House of Representatives, could prove a boon for the pot industry in the U.S. It was Sessions who rescinded an Obama-era policy used as protection for states that have legalized marijuana. After Tuesday’s midterm elections, Michigan became the 10th state — and the District of Columbia — which voted to legalize marijuana. Although South Dakota voted down a measure to legalize pot, Missouri and Utah voters supported legalizing it for medicinal use. But that’s not all. Democrats winning a majority in the House for the first time since cannabis liberalization began marks “a fundamental shift in the U.S. legislative landscape which could usher in a period of positive cannabis reform,” GMP Securities analyst Robert Fagan wrote in a note to clients. “For instance, Dems will now gain majority control of the powerful House Rules Committee, which previously acted as a dogged gatekeeper of positive cannabis reform for the past 2 years under the oversight of anti-cannabis Republican Pete Sessions,” Fagan wrote, with Sessions losing his House seat from Texas to Democrat Colin Allred. “In our view, these midterm results combined with a strong pipeline of upcoming catalysts should serve to drive a decoupling of valuation multiples for the U.S. cannabis sector to eventually reach a premium over Canadian LP peers,” Fagan wrote. Canaccord Genuity analyst Bobby Burleson said he believes Michigan is a “particularly important market” given the state’s population. He estimates Michigan’s marijuana market to grow from a value of about $856 million in 2018 to $1.3 billion in 2022. Gubernatorial wins by a pro-cannabis candidate in Illinois and by the first Democrat in Nevada since 1994 should be viewed as wins for U.S.-based cannabis companies. Among U.S. companies poised to benefit from Illinois and Nevada results, according to Burleson, shares of MedMen Enterprises Inc. rallied 7.8% and Planet 13 Holdings Inc ran up 9.0%. In other pot stocks, shares of Toronto-based Namaste Technologies Inc. gained 5.7% after the company said its Cannmart Inc. subsidiary signed an agreement with AgMedica Bioscience Inc. to buy medical cannabis from AgMedica to sell on Cannmart’s online platform. AgMedica is a licensed producer of medical cannabis under the Access to Cannabis for Medical Purposes Regulations (ACMPR), which holds cultivation and sales licenses. MariMed Inc.’s stock climbed 7.8% after the Massachusetts-based manager of cannabis facilities said it named Charles Finnie, most recently a senior research analyst at Roth Capital Partners, its chief strategy officer, to head up its merger-and-acquisitions, investment and investors relations strategies. Elsewhere, shares of GW Pharmaceuticals PLC gained 6.3%, Aleafia Health Inc. fell 1.7%, Green Organic Dutchman Holdings Ltd. slipped 0.6%, Hexo Corp. advanced 2.7% and Supreme Cannabis Co. Inc. advanced 5.7%. The ETFMG ETF has now run up 37% over the past three months and the Horizons ETF has soared 40%, while the S&P 500 index has lost 1.8%.
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Marijuana Stocks Spiked After Jeff Sessions Resigned

Postby smix » Thu Nov 08, 2018 1:55 am

Marijuana Stocks Spiked After Jeff Sessions Resigned
The Atlantic

URL: https://www.theatlantic.com/health/arch ... ks/575296/
Category: Business
Published: November 7, 2018

Description: The former attorney general was a major political roadblock to further cannabis legalization.
Jeff Sessions is gone, and marijuana advocates—and the businesses that serve them—are celebrating. Forced out by President Donald Trump, Sessions tendered his resignation as the attorney general on Wednesday afternoon, and his departure has signaled the fall of a major political roadblock to more widespread legalization. In response, stock prices for cannabis businesses have leapt. Nasdaq’s Alternative Harvest Marijuana ETF, a fund that bundles tradable assets for the cannabis industry, was up 5.6 percent in the hour after the Sessions announcement, with a peak share price of $36.97—a nearly $2 gain for the fund. On the day, the fund was up more than 7 percent at the close of trading. Individual cannabis-company stocks are also seeing the effects of Sessions’s departure. According to CNBC, the Canadian company Tilray got a boost of 30 percent in the day’s trading, along with jumps of more than 8 percent for both Canopy Growth and Aurora Cannabis. All of these companies continued to see gains in the immediate extended-hours trading. People in favor of legalization were already having a good week. As a result of Tuesday’s midterm elections, Michigan became the the tenth state in the country to legalize recreational marijuana use, Illinois elected a legalization-minded governor, and voters in Missouri and Utah voted to legalize medicinal cannabis. On top of that, Representative Pete Sessions (no relation to Jeff) of Texas lost his seat in the House of Representatives, where his position at the head of the Rules Committee allowed him to block votes on marijuana amendments. That position will now be held by a Democrat as the party retakes control of the House. That Sessions’s resignation alone prompted such sharp gains in an already promising week for cannabis investors demonstrates just how big of an obstacle he represented to advocates’ hopes for continued legalization. His fierce opposition to marijuana use and normalization was one of the most well-known arcs in his career. In April 2016, he proclaimed in a Senate hearing that “good people don’t smoke marijuana,” and he argued that it was a gateway drug for abuse of substances like cocaine and heroin, even linking it to America’s growing opioid epidemic. (Some research suggests, to the contrary, that access to marijuana could reduce some opioid use.) Under Sessions, not only had efforts to legalize marijuana at the federal level for even medical use been stymied, but the Department of Justice reversed Obama-era enforcement guidelines. Those rules instructed federal law enforcement not to interfere with states allowing marijuana sales, which have always been in violation of federal law. The differences in state- and federal-level marijuana legality have proved a growth issue for the cannabis industry—for example, they can create legal and logistical problems for business owners when it comes to things like corporate banking. Trump has appointed Sessions’s chief of staff, Matthew Whitaker, as his acting replacement. It’s unclear how long Whitaker could be in the role or who might replace him, and what that person’s thoughts on cannabis legalization might be. Republican policy makers generally oppose it, though a majority of Republican voters have been found to support legalization. But for now, weed investors appear to be breathing—or inhaling—a sigh of relief.
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