Cannabis stocks crater as Florida fails to garner needed votes for adult use
Trulieve, which backed the Florida campaign, saw its stock tumble 44% Wednesday, the most in a single day
Cannabis stocks tanked on Wednesday, led by Florida’s biggest medical-cannabis operator Trulieve, which had backed a campaign for adult recreational legalization in Florida that failed to garner the needed votes.
Trulieve’s stock
TRUL
TCNNF
Was down 44% to put it on track for its worst-ever one-day percentage decline after the Florida marijuana amendment fell short of the 60% supermajority needed to approve constitutional amendments.
Trulieve had contributed almost $145 million of the $153 million campaign through the end of October, as the Associated Press reported. The measure was opposed by the Florida Republican Party and Gov. Ron DeSantis, who said it would reduce the quality of life by leaving a marijuana stench in the air.
The move weighed heavily on the AdvisorShares Pure US Cannabis exchange-traded fund
MSOS
, which was last down 25%. Trulieve has the second biggest weighting in the ETF at 24.1%, after Green Thumb Industries Inc.
GTII
GTBIF
, which was down 16%.
Other states voting on cannabis produced mixed results. Nebraska passed medical cannabis, but efforts to approve it for recreational use in North Dakota and South Dakota failed.
Alliance Global Partners said former President Donald Trump’s sweeping victory in the presidential race, and the Republican control of the Senate, were promising for cannabis reform. Trump has said he is in favor of legalizing the plant and allowing companies access to the banking system.
“We still view rescheduling as the most likely federal catalyst to come—with the DEA hearing being pushed out to Jan/Feb 2025 (from Dec 2024),” AGP analyst Aaron Grey wrote in a note to clients.
“We will be keeping an eye on who Trump appoints as Attorney General along with who takes over as Republican Senate Majority Leader with Sen. Mitch McConnell retiring — and we view a more moderate person in both positions being more favorable to cannabis reform.”
McConnell is an ardent opponent of cannabis legalization.
