Pot stocks rally toward sixth-straight gain ahead of midterm elections

Shares of cannabis companies were broadly higher Tuesday, with the sector headed for a sixth-straight gain, as investors wait for election results to see if two more states–Michigan and North Dakota–will make recreational marijuana legal. The ETFMG Alternative Harvest ETF ran up 4.0%, with 25 of 37 components trading higher. It has gained 19% amid a six-session win streak. The Horizons Marijuana Life Sciences ETF hiked up 4.9%. Among the sector’s more-active stocks, Aurora Cannabis Inc. surged 3.3%, Canopy Growth Corp. rose 8.8%, Cronos Group Inc. soared 13% and Tilray Inc. rallied 5.6%. Shares of GW Pharmaceuticals PLC slipped 0.8%, although Morgan Stanley reiterated its overweight rating and price target of $227, which was 59% above current levels. Analyst David Lebowitz expects strong demand for Epidiolex, the first cannabis-based drug on the market approved by the Food and Drug Administration, with sales expected to be recorded starting in the fourth quarter. The ETFMG ETF has rallied 30% over the past three months, while the S&P 500 has lost 3.5%.

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