Tuesday's Market Minute: Why Georgia Runoff Elections Are Critical For Pot Stocks

Although cannabis is not formally on the ballot in Georgia’s Senate runoff elections today, looking at pot stocks’ move during Monday’s session might tell you otherwise. Today two Republican senators, Kelly Loeffler and David Perdue, will face Democratic representatives Raphael Warnock and Jon Ossoff. These races will determine which party controls the U.S. Senate, which could be vital for the future of the U.S. marijuana industry.

The National Drug Policy Alliance has said it will support Warnock and Ossoff with donations from various action committees. From a federal level, things prove to be more challenging with Senate Majority Leader Mitch McConnell of Kentucky and more than half of Republicans advocating against legalization. This will then block the House of Representatives on any attempted progress on easing marijuana restrictions federally. However, if Senate control were to be flipped, there could be legal headway made in the $17 billion dollar cannabis industry.

Today, nearly 70% of Americans registered to vote supporting the national legalization of marijuana. The latest data from a September 30-October 15 poll from Gallup saw marijuana legalization prompts on the ballots in several states. In Arizona, Montana, New Jersey, and South Dakota, voters legalized the use of recreational pot on November 3. They will join 11 other states (and the District of Columbia) in legalizing marijuana for recreational purposes. But currently, growers and sellers alike cannot ship products across state lines – even across the states that have legalized cannabis. Companies are mostly shut off from these markets, and banks allegedly risk the loss of charters if they do any sort of transaction for the marijuana business.

However, investor optimism leading up until today’s event remains high, with Aurora Cannabis Inc ACB shares closing up over 14%, and other cannabis-related stocks Canopy Growth Corp CGC, Aphria Inc APHA, and Tilray Inc TLRY all posting significant gains.

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