(Bloomberg) -- Cannabis companies rallied in premarket trading on Thursday, reversing a slump the day before, on renewed optimism over the lifting of restrictions on marijuana sales in five states this week.
Aurora Cannabis (NYSE:ACB) Inc., Tilray (NASDAQ:TLRY) Inc. and Aphria (NASDAQ:APHA) Inc. led the advance, with double-digit gains. Aurora shares rose almost 30%, while Tilray advanced 24%. Shares in Aphria, which operates mainly in Canada, rose 15% in pre-market trading after the company said it plans to buy a craft brewing company to expand into the U.S. ahead of a potential move to legalize.
The ETFMG Alternative Harvest exchange-traded fund, or MJ, climbed 10% in early trading after closing down 3.1% on Wednesday. The gains follow ballot passages in Arizona, Mississippi, Montana, New Jersey, and South Dakota, which will now add to 44 states that allow marijuana for medical or recreational purposes.
Boris Jordan, chairman of Curaleaf Holdings (OTC:CURLF) Inc., one of the largest cannabis companies, said on Wednesday the state passages were “a green landslide.”
Despite growing support for cannabis in the U.S., federal legislation for legalized pot may be off the table for now, particularly with the possibility that Republicans retain control of the senate.
A divided government however may bode well for the enactment of the Secure and Fair Enforcement Banking Act, known as the SAFE Act, which would enable cannabis banking, senior policy analyst Jaret Seiberg at Cowen & Co wrote in a note.
“This is likely to become the primary focus for the cannabis industry. The downside is that the SAFE Act would not be needed if there was a sweep as Democrats would have legalized cannabis,” Seiberg wrote.
Trulieve Cannabis (OTC:TCNNF) Corp. CEO Kim Rivers said Mitch McConnell’s statement Wednesday about getting the U.S. Senate back to pass a stimulus bill by the end of the year was more good news for the industry on top of the election results.
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