(Reuters) – Cannabis stocks surged on Wednesday as Democrats won a major U.S. Senate race in Georgia and led another, getting closer to a stunning sweep that would give them control of Congress and power over their pledge to weed to legalize to comply.
US-listed shares of Aphria Inc., Hexo Corp and Cronos Group rose between 10.4% and 13%.
Pot stocks have risen since Joe Biden’s victory in the US presidential election in November and increased demand for weed during the coronavirus-led lockdowns.
Vice President-elect Kamal Harris has promised decriminalization of the pot, which would remove it from the list of classified substances. But with Republicans gaining control of the senate in the November elections, the passing of laws to decriminalize the senate looked bleak.
Although marijuana has been legalized in some states, its use is still illegal at the federal level. Import of marijuana into the US from other countries, or even between states, is banned, and federally-controlled institutions, such as banks, can even be charged with money laundering if they partner with marijuana growers.
Democrat Raphael Warnock’s victory over incumbent Republican Kelly Loeffler and Jon Ossoff’s lead over incumbent David Perdue on Wednesday would give Democrats the power to advance President-elect Joe Biden’s policy goals.
“As Democratic-elect Joe Biden takes office later this month and the House remains under Democratic control, a Democratic sweep could pave the way for more progressive cannabis laws,” Aaron Gray of Alliance Global Partners said in a note.
Reporting by Arunima Kumar in Bengaluru; Adaptation by Shinjini Ganguli