Donald Trump will support congressional efforts to protect states that have legalized cannabis, which is illegal south of the border under federal law.
Licensed producer Aphria Inc.’s stock rose nearly 15% to close at $1.48 on the Toronto Stock Exchange, Canopy Growth Corp. closed up 7.84% at $29.84, while Friday Night Inc., which owns cannabis assets in Las Vegas, saw its shares rise by more than 20% to close at $0.65 on the Canadian Securities Exchange.
The boost to cannabis stocks from the news shows how much sentiment and momentum can move the sector, said Allan Small, a senior investment adviser at HollisWealth.
“Overall I think the cannabis stocks, they’re a crapshoot on a daily basis really,” said Small.
“When people hear the hype, and they get momentum, these stocks can move higher, so it doesn’t mean they fundamentally have to be sound and cheap and look good. If you have good momentum behind you, sometimes perception is more powerful that reality.”
Oil and gold stocks also saw gains as prices rose. The May crude contract closed up US32¢ at US$67.39 per barrel and the June gold contract ended up US$6 at US$1,347.90 an ounce.
U.S. stocks saw declines as several banks reported higher than expected profits, but still declined in part because of some concerns investors saw in financial reports.
In New York, the Dow Jones industrial average closed down 122.91 points at 24,360.14. The S&P 500 index ended down 7.69 points at 2,656.30 and the Nasdaq composite index was down 33.60 points at 7,106.65.
The Canadian dollar averaged US79.38¢, down 0.01 of a U.S. cent.
The May natural gas contract ended up US5¢ at US$2.74 per mmBTU and the May copper contract was up US1¢ at US$3.07 a pound.