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Shares of cannabis company’s fell in early trading Wednesday, as investor disappointment that a Democratic sweep failed to materialize offset a boost from referendum wins in a number states.
The ETFMG Alternative Harvest exchange-traded fund MJ, +1.92% fell 1.3% in premarket trading.
Among the more active U.S.-listed shares, Tilray Inc. TLRY, -0.60% dropped 2.9%, Aurora Cannabis Inc. ACB, +3.80% ACB, +2.72% shed 2.7%, Canopy Growth Corp. CGC, -2.24% WEED, -2.95% slumped 2.8% and Cronos Group Inc. CRON, +0.49% CRON, +0.50% lost 3.0%.
Arizona, New Jersey, Montana and South Dakota voted to approve recreational marijuana sales to adults, and Mississippi voted to legalize medical marijuana.
Don’t miss: With Election Day sweep across four states, recreational pot sales will soon reach one-third of Americans.
Meanwhile, hopes that Democrats would take over majority control of the Senate are fading, as preliminary results as of early Wednesday are showing that Democrats have not gained much ground.
Also read: Biden leads Trump as control of presidency and U.S. Senate are still in doubt.
“While the outcome is still unknown…a Democratic sweep, while preferred by many cannabis investors, seems very unlikely,” analyst Bill Kirk at MKM Partners wrote in a note to clients.
The marijuana ETF had run up 12.5% over the past month through Tuesday, compared with a 0.6% gain for the S&P 500 index SPX, +1.78%, as expectations of a Democratic sweep increased.
On the bright side for pot investors, a Democratic sweep may not have been needed to brighten the outlook for pot investors. Kirk said it was worth noting that cannabis being on the Arizona ballot appeared to be a “meaningful contributing factor” in Joe Biden’s chances of winning the state. (Biden held a lead in the state as of this writing but it was still too close to call the winner.)
“We believe politicians of both parties will notice its impact on voters and be more likely to voice support for future cannabis initiatives,” Kirk wrote.
