Cramer Weighs In On Cannabis Sector Selloff

Cannabis stocks were mostly trading lower Wednesday and for good reason: a "blue wave" result from Tuesday's presidential election isn't going to transpire, CNBC's Jim Cramer said on "Squawk on the Street."

What Happened: Heading into Tuesday's election, a major Democratic victory across multiple branches of the government was considered to be a major catalyst for cannabis stocks.

"There was a belief that a blue wave would immediately mean that everybody can start smoking recreationally and drinking," Cramer said.

Arizona, Montana, South Dakota and New Jersey all legalized recreational marijuana on Tuesday.

See Also: Oregon Becomes First US State To Decriminalize Drug Possession, Begins Psilocybin Program

Why It's Important: Many people were excited over the prospect of a Democratic-controlled House and Senate working with a Biden White House to quickly transform the weed sector into a "legitimate industry" but "that is not happening," according to Cramer.

Republicans retained key Senate seats, dashing Democrats' hopes to flip the Senate.

Here is a summary of how some of the more notable cannabis stocks were trading early Wednesday afternoon.

Aurora Cannabis Inc ACB down 9.7% at $4.44.

Aphria Inc APHA down 0.6% at $4.96.

Canopy Growth Corp CGC down 5.9% at $19.24.

Cronos Group Inc CRON down 6.7% at $5.64.

Tilray Inc TLRY down 7.4% at $6.12.