Weed stocks: Tilray spikes as Attorney General Jeff Sessions steps down

Markets Insider

• Attorney General Jeff Sessions, a longtime opponent of legal marijuana, resigned Wednesday as attorney general.
• The cannabis producer Tilray surged 30% on the news.
• In the 2018 midterm elections on Tuesday, voters in Michigan passed a measure to make the state the 10th to legalize recreational marijuana. 
• Watch Tilray trade in real time here.

The cannabis producer Tilray exploded higher Wednesday, up as much as 30%, after Attorney General Jeff Sessions, a longtime opponent of legal marijuana, resigned as attorney general after months of speculation about his future. Shares had already been up about 15%.

“At your request, I am submitting my resignation,” Sessions said in his resignation letter, adding that it came at the request of President Donald Trump.

Sessions resignation could be good news for the crusade for legal marijuana, depending on who Trump picks as his replacement.

In January, Sessions rescinded an Obama-era policy directing the Justice Department to keep its hands off of state-legal cannabis. The Justice Department’s new guidance leaves it up to federal prosecutors to decide how aggressively to pursue cannabis.

On Tuesday, Michigan became the 10th US state, along with Washington DC, to legalize marijuana for recreational use. Thirty-three states and Washington DC allow medical marijuana. 

In August, Constellation Brands, the maker of Corona beer and Svedka vodka, announced a $4 billion investment in Canopy Growth. That sparked a “green rush” into the marijuana space as investors on both Wall Street and Main Street took notice of the space, sending producers market values up more than 100% in a matter of months.

And last month, Canada became the second country to legalize marijuana for recreational use, putting a top in shares. But the future remains bright for the sector.

“With Democrats winning the House of Representatives and additional states voting to create medical and recreational cannabis markets, we believe its increasingly likely Congress could take action to regulate and tax cannabis at the federal level,” Mass Roots CEO Isaac Dietrich said.

“We expect the perceived risks related to the cannabis industry to continue to dissipate, which could lead to a shift of institutional capital and interest from Canadian licensed producers to companies focused on the regulated United States market.”