Marijuana stocks popped on Monday, as investors looked ahead to crucial Senate runoff elections. By the close of trading, shares of Sundial Growers (NASDAQ:SNDL), Cronos Group (NASDAQ:CRON), and Curaleaf Holdings (OTC:CURLF) were up 16.1%, 9.7%, and 7.3%, respectively.
Investors appear to be growing more optimistic that the Democrats will be able to win two Senate seats in Georgia’s runoff elections on Tuesday. Should they do so, it could make the decriminalization of marijuana more likely and perhaps pave the way for legalization at the federal level.
While both races are likely to be close, recent polls, such as those reported by political polling site FiveThirtyEight, suggest that Democratic candidates Jon Ossoff and the Rev. Raphael Warnock appear to have gained slight leads over Republican Senators David Perdue and Kelly Loeffler in recent days.
President-elect Joe Biden and Vice President-elect Kamala Harris have promised to decriminalize marijuana, which would make it easier for cannabis companies to gain access to traditional financial services. Many banks have declined to serve marijuana-related businesses out of fear of breaking federal laws. Decriminalization might lead more banks to provide loans and other services to marijuana producers.
Sundial Growers, Cronos Group, and Curaleaf Holdings would all benefit from such developments, which would lower their cost of capital. And by reducing their financing costs, they could accelerate their growth plans.