Market cap madness—cannabis investors enjoy the highs after Kamala Harris promises decriminalization

The Democratic vice presidential nominee has shown that her words can move markets.

Kamala Kamala Harris market cap billion

Democratic Party vice-presidential candidate Kamala Harris is hoping that cannabis users can give Joe Biden an edge over Donald Trump. (Debate screen shot)

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Wow! That’s on the lips of investors in Aphria Inc. after witnessing a 27 percent rise in the stock this week. And that wasn’t the only Canadian cannabis company to see a big run-up in its share price and market cap. Canopy Growth Corporation and Tilray Inc. also saw heady increases after Sen. Kamala Harris promised in Wednesday’s (October 7) vice-presidential debate to decriminalize marijuana.

Aphria stock closed the week at $7.53 on the Toronto Stock Exchange. That elevated its market cap to $2.17 billion.

Moreover, Aphria’s share spike also coincided with news of its first shipment of dried flower to its German subsidiary.

In addition, investors’ confidence rose due to buoyant expectations for its earnings report, due on Thursday (October 15). Analysts at CIBC and Cantor Fitzgerald have both gushed praise for the Leamington-based weed company’s competitive position.

Meanwhile, shares in Canada’s most valuable cannabis venture, Canopy Growth Corporation, shot up by 26.5 percent this week. The Smith Falls–based company’s stock closed at $23.66 on Friday (October 9) in Toronto. Its market cap stands at $8.78 billion.

This, too, appears to be linked to the Kamala effect.

On Monday (October 6), Canopy Growth subsidiary BioSteel Sports Nutrition issued a news release announcing endorsements from some athletes and influencers, most notably sports journalists Erin Andrews and Amanda Balionis.

This news alone wouldn’t be sufficiently spectacular to trigger the astonishing share price rise. That lends further credence to the view that the political climate might be helping to propel the stock upward.

Keep in mind that Kamala Harris isn’t the only U.S. legislator supporting weed freedom. This week, Vermont’s Republican governor, Phil Scott, chose not to veto legislation in his state creating a legal retail cannabis market. It means that legal dispensaries will likely open in Vermont in 2022.

Kamala effect boosts market cap for all the big weed companies

Even Tilray Inc., which has been battered this year by investors, also enjoyed the ride up as a result of the Kamala effect. The Nanaimo-based licensed producer’s shares jumped 24.5 percent this week to close at US$6.04 on NASDAQ. Tilray’s market cap stands at $768.15 million, or just over $1 billion in Canadian currency.

And Canada’s other billion-dollar weed company, Cronos Group Inc., also had a good week.

Over the last five days of trading, Cronos stock jumped 13 percent, closing at $7.54 on Friday on the Toronto Stock Exchange. The Toronto-based company is now worth $2.64 billion.

So it’s fair to say that Kamala Harris now has the power to move markets.

Meanwhile, a former member of Canada’s billion-dollar cannabis club, Aurora Cannabis Inc., failed to match the performance of its prime competitors.

Shares in the struggling Edmonton-based company only rose by eight percent this week. Normally, an increase like that would be reason for celebration, but not so when the others were flying so much higher.

On Friday, Aurora shares closed at $6.59 in Toronto. As a result, its market cap stands at $801 million.

In the debate, Kamala Harris not only promised to decriminalize weed. She also pledged that if Joe Biden is elected president, his administration “will expunge the records of those who have been convicted of marijuana”.

Charlie Smith

I'm the editor of the Georgia Straight newspaper in Vancouver, as well as a CannCentral contributor.

Discussion


  • Frank Sterle Jr. October 16, 2020 03:33 PM

    Even if pot consumption was found to be both safe and beneficial, I still doubt that any U.S. federal government would risk angering the American pharmaceutical industry by fully legalizing pot consumption, recreational or medicinal, as THC is a known healthier alternative to tranquilizer use/abuse – therefor a threat to the industry’s huge profits.
    Their governance, however, would most likely maintain thinly veiled yet firm ties to large corporations, as though elected heads should represent big money interests over those of the working citizenry.
    It may be reflective of why those powerful interests generally resist proportional representation electoral systems of governance, the latter which tends to dilute the corporate lobbyist influence on the former.

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