Large Cannabis Production Companies may get another stock boost from midterm elections
Recently, Cowen’s Washington Research Group investigated how the possible outcome of the November elections would affect cannabis production companies and the marijuana industry as a whole.
The investigation provided positive news for the budding industry, whether the Republicans or the Democrats will control the chambers of Congress
One major question is whether the Republicans will be able to maintain control of both chambers of Congress.
Only 35 out of the 100 seats in the Senate are available. However, all the 435 seats in the lower House of Representatives are available.
For the Democratic party to take control of the legislative agenda and restrict Trump‘s ability to implement his agenda, they need to obtain control of both houses.
Cowen’s senior analyst Vivien Azer believes that the best thing for cannabis production companies and the marijuana industry would be if the Democrats were to succeed in taking over.
“Few industries are better positioned than cannabis regardless of the outcome. Generally speaking, the higher the Blue Wave, the better for the budding industry though even a potential Red Wave is likely to feature pockets of good news.”
In recent weeks, marijuana stock has made a significant jump on Wall Street, as Canadian marijuana producer Tilray rose 40 percent Wednesday. Additionally, producers Canopy Growth and GW Pharmaceuticals rose by 7 percent and 3 percent, respectively.
Azer sees the main roadblock for the marijuana industry and cannabis production companies is Attorney General Jeff Sessions and his well-known passion for marijuana legalization.
His statement that “good people don’t smoke marijuana,” has not been forgotten.
However, President Trump’s increasing criticism of the Attorney General raises the question of if he is likely to be fired after the elections or if he will resign from the post.
“It is hard to imagine his replacement being more hostile to cannabis. Though if Sessions is replaced, and the Trump re-elect will continue to play offense in Colorado, which could pay cannabis dividends.”
In an interview with the Hill Tv on Tuesday, the President made a very demeaning statement regarding Sessions.
“I don’t have an Attorney General. It’s very sad.”
If the Democrats fail and the Republicans are able to maintain the majority of seats throughout Congress, cannabis will likely remain stagnant with a potential improvement coming from the removal of Sessions.
State races are also a stepping stone for the future of marijuana as well as the high-flying stocks of cannabis production companies.
Gubernatorial races in Florida, Connecticut, New Hampshire, Rhode Island, New York, and Illinois have the potential towards the Democrats.
According to Cowen’s estimates, if adult use legalization reaches to 10 states, that would cover roughly 25 percent of the population and 28 percent of GDP.
Cowen’s firm recommends clients buy into Tilray Canopy Growth Corporation, KushCo, Constellation Brands, and Imperial Brands.