Why more upside remains in cannabis even after a clean sweep of legalization in 5 states

Five state-level marijuana initiatives were on the ballot this election cycle and all five garnered enough support to pass, setting the U.S. cannabis sector up to grow by an additional $9 billion over the next five years, according to one industry tracker.

While that’s certainly a boost and a dream scenario for cannabis investors when it comes to how the state ballot measures could’ve gone, the hope that Senate control would flip to more cannabis-friendly Democrats is fading.

Should Republicans maintain control of the Senate as they look poised to do, as more races are officially called, that would seemingly dampen the odds of legalizing cannabis at a federal level through the Kamala Harris-backed Marijuana Opportunity Reinvestment and Expungement (MORE) Act. That fact appeared to weigh more heavily on Canadian cannabis companies looking to expand into the much larger U.S. cannabis market. Canopy Growth (CGC) shares dropped nearly 7%, while Aurora Cannabis (ACB) shares shed about 10%.

U.S.-based multi-state operators, however, like Chicago-based Green Thumb Industries and Cresco Labs, both fared much better, ending the post-election-day session in the green. That could be because more state legislatures might now feel the pressure to legalize as well, according to Cowen Managing

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