Donald Trump did Marijuana real justice by firing Jeff Sessions.

Donald Trump and Jeff Sessions
Donald Trump and Jeff Sessions

Shares of cannabis companies traded broadly higher Wednesday, as U.S. midterm elections are likely to usher in a green wave, with Michigan voting to legalize recreational pot and other states supporting medical marijuana likely just the beginning.

The sector got a further boost after long-time cannabis opponent Attorney General Jeff Sessions resigned “at the request” of President Trump.

Jeff Sessions resignation, coupled with a Democrat-controlled House of Representatives, could prove a boon for the pot industry in the U.S. It was Sessions who rescinded an Obama-era policy used as protection for states that have legalized marijuana.

After Tuesday’s midterm elections, Michigan became the 10th state — and the District of Columbia — which voted to legalize marijuana. Although South Dakota voted down a measure to legalize pot, Missouri and Utah voters supported legalizing it for medicinal use.

But that’s not all. Democrats winning a majority in the House for the first time since cannabis liberalization began marks “a fundamental shift in the U.S. legislative landscape which could usher in a period of positive cannabis reform,” GMP Securities analyst Robert Fagan wrote in a note to clients.

“For instance, Dems will now gain majority control of the powerful House Rules Committee, which previously acted as a dogged gatekeeper of positive cannabis reform for the past 2 years under the oversight of anti-cannabis Republican Pete Sessions,” Fagan wrote, with Sessions losing his House seat from Texas to Democrat Colin Allred.

“In our view, these midterm results combined with a strong pipeline of upcoming catalysts should serve to drive a decoupling of valuation multiples for the U.S. cannabis sector to eventually reach a premium over Canadian LP peers,” Fagan wrote.

Canaccord Genuity analyst Bobby Burleson said he believes Michigan is a “particularly important market” given the state’s population. He estimates Michigan’s marijuana market to grow from a value of about $856 million in 2018 to $1.3 billion in 2022.

Gubernatorial wins by a pro-cannabis candidate in Illinois and by the first Democrat in Nevada since 1994 should be viewed as wins for U.S.-based cannabis companies.

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