Cannabis Referendums Won Big on Election Day

Every ballot measure was approved

Kristoffer Inton 6 November, 2020 | 4:28AM
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Cannabis leaf
Days after election day, who will be the U.S. president for the next four years remains to be determined as votes continue to be counted. In stark contrast to the fate of the country’s highest office, cannabis won by a landslide in state referendums. Every ballot measure was approved, as Arizona, Montana, and New Jersey expanded legalization to recreational cannabis, Mississippi legalized medical cannabis, and South Dakota shockingly approved both medical and recreational cannabis in one day. Even Oregon’s votes on legalizing psilocybin and decriminalizing all drugs were approved. We view the success on all votes as evidence of still-growing acceptance for legalization among Americans. It also confirms our long-term view for nearly 25% average annual growth for the U.S. recreational market and nearly 15% for the medical market through 2030.

Amongst our coverage, 4-star Curaleaf (CURA), 3-star Green Thumb (GTII), and 4-star Canopy Growth (WEED) immediately benefit from the election outcome. While Canopy only operates in Canada, its standing agreement to acquire U.S. multistate operator, Acreage Holdings, upon a change in federal law gives it economic exposure to Tuesday’s outcome. All three companies already operate in medical cannabis in New Jersey, while Curaleaf also operates in Arizona. When previous states have legalized recreational cannabis, existing medical cannabis operations were entrenched to benefit immediately. 

Three-star Cronos (CRON), 3-star Tilray (TLRY), and 5-star Aurora (ACB) have some exposure to the U.S. but only through hemp-derived CBD. As a result, Tuesday’s outcome will have no direct impact. Despite its announcement the day after the election to acquire U.S. craft brewer Sweetwater, 5-star Aphria (APHA) will also see no direct impact.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Aurora Cannabis Inc0.50 USD2.71Rating
Canopy Growth Corp1.03 CAD6.19Rating
Cronos Group Inc2.82 CAD0.18Rating
Curaleaf Holdings Inc5.88 CAD1.91Rating
Green Thumb Industries Inc15.41 CAD-1.28Rating
Tilray Brands Inc2.54 CAD0.40Rating

About Author

Kristoffer Inton

Kristoffer Inton  Kristoffer Inton is an equity analyst for Morningstar, covering gold, coal and cement companies. Before joining Morningstar in 2013, he was an investment banking associate for Guggenheim Securities in New York. He holds a bachelor’s degree in finance with high honours from the University of Illinois.

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