Why the shares of Aurora Cannabis, Charlotte’s Web and Aphria have increased today

What happened

Shares of Canadian marijuana companies Aurora Cannabis (NYSE: ACB) and Aphria (NASDAQ: APHA), as well as the American supplier of cannabidiol (CBD) products Charlotte’s Web Fund (OTC: CWBHF), have been in tears since the US elections on November 3.

That race seemed to continue today, with Aphria and Charlotte’s Web up 10% earlier, while Aurora was up around 5%. These jumps have decreased somewhat since then. As of 11:20 a.m. EST, Aphria shares were still up about 7%. But Charlotte’s Web shares are up 3.5%, while Aurora has forsaken virtually all of today’s gains so far.

So what

The cannabis industry in general was boosted by the US election earlier this month. The shares of all three companies have risen 50% to 80% since then.

ACB data by YCharts

But to put it in perspective, out of the three, only Aphria’s shares have been positive since the start of 2020. The election has pushed more buyers into the sector due to a few wins at the polls. Five states – New Jersey, Arizona, Mississippi, Montana, and South Dakota – had voting initiatives related to legalizing marijuana, and all five were passed.

The continuation of the election campaign today may be linked to the relief created when President Trump said yesterday that he would “certainly” leave the White House if the electoral college officially elects President Joe Biden next month.

Now what

A Biden administration may be more supportive of pot legalization initiatives, but the shares of each of those companies will trade on their own business fundamentals. And only Aphria has announced any significant news recently.

Aphria recently announced the acquisition of American craft brewery SweetWater Brewing Company. It seems like a good solution, and the company said the purchase would pay off immediately for profits.

On the other hand, Aurora spent much of this year restructuring its business and raising capital as it suffered mounting losses. The changes included cutting jobs, consolidating production, and selling additional inventory to raise funds. Even with its pop since the election, stocks are down 66% since the start of the year.

Charlotte’s Web delivered encouraging news in its recently released third quarter results. While revenues were mostly flat from the previous year quarter, it saw sequential growth in both its direct-to-consumer (DTC) and business-to-business (B2B) segments. Management also expressed optimism in the call for the results, saying they expect “the increase in consumer momentum” to continue.

Investing in the cannabis industry shouldn’t be seen as a short-term plan. But while Aurora’s business is still a question mark during its transition, at least Aphria and Charlotte’s Web recently reported some decent news for investors, helping to justify a rise in the share price.