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How Biden's Win Could Be Good News For The Cannabis Industry

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How Biden's Win Could Be Good News For The Cannabis Industry

Election day is always a big deal. This election day, in particular, brought with it more stress than usual, and the election "day" alone lasted a bit longer with plenty of drama. With all this turbulence that marked the entire year, it's no surprise that more and more voters are supporting cannabis legalization, as more and more states are legalizing and decriminalizing cannabis use. Moreover, cannabis legalization is going beyond democratic states. South Dakota, Montana, and Mississippi, which are traditionally conservative states, are also boarding the train.

Aurora Cannabis

The US election had a significant impact on cannabis companies as well as the overall market. Aurora Cannabis Inc (NYSE: ACB) went up 135% in just a couple of days after Election day. This came as much-needed relief to its shareholders, as the stock was dropping since the beginning of the year. Unlike its competitors, Aurora is struggling to expand internationally despite the potential of medical cannabis.

On Monday, Aurora delivered better than expected fiscal 2021 first-quarter results. It posted total net revenue of CA$67.8 million, while the company's latest forecast was in the range between CA$60 million and CA$64 million. Although the result is better than expected, this is only a small increase of 0.4% compared to the previous quarter as well as a decrease of 10% comparing to the same quarter last year. The company favors to present profitability on the level of EBITDA (adjusted earnings before interest, taxes, depreciation, and amortization) as CA$57.9 million, which is an increase of 79% when comparing quarter over quarter. It is important to note that recent restructuring activities are included in this figure. After reporting higher-than-forecast sales and narrowing losses, Aurora Cannabis (ACB) jumped 20% whereas its Canopy Growth Corp (NYSE: CGC) surged 10%.

Cannabis Peers

Aurora was not the only cannabis company that made some gains in the previous days. Tilray Inc (NASDAQ: TLRY) enjoyed a boost of 71.6%. Cronos Group Inc (NASDAQ: CRON), which has a big investment from tobacco giant and Marlboro owner Altria Group Inc (NYSE: MO), jumped 35.9%. Moreover, Canopy Growth reported a record CA$135 million in net revenues during the last quarter, followed with a 14% stock jump. Cronos Group's shares rose 17%, while Tilray reported a Q3 loss of $2.3 million or 2 cents a share, which is an improvement from a loss of 36 cents a share from the same quarter last year.

A Bright Era Ahead

Cannabis stocks soared on sold results and Biden's win, inspiring hopes of further legalization. Canopy's CEO, which has the financial backing of Constellation Brands, Inc. (NYSE: STZ) believes that Biden's win is an important step towards federal permissibility of cannabis in the U.S. Although the voting part of the 2020 US presidential election is complete, it could be weeks and probably several stress-causing situations before Joe Biden becomes the official winner as incumbent President Donald Trump refuses to admit defeat. Bear in mind that most of these good results came from short squeezes, which might be what happened to Aurora as some short-sellers could have rushed to cover their positions. Unfortunately, most short squeezes collapse and their artificially driven momentum comes to an end at some point. There could have also been investors who aren't short-sellers and are simply waiting for the boom of marijuana legalization. But the overall picture is that the world is opening towards the cannabis industry, more precisely, medical marijuana, CBD and THC-bearing cannabinoids as well as those do not contain THC, the psychoactive component of cannabis.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you're interested in becoming an IAM journalist contact: contributors@iamnewswire.com

The post A Potential Biden's Win Could Be Good News for the Cannabis Industry appeared first on IAM Newswire.

Photo by Rick Proctor on Unsplash

 

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Posted-In: IAM NewswireNews Politics General

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