UPDATE 1-Canadian medical marijuana stocks higher after Trudeau win
(Adds banker, CEO and analyst comments, updates share price moves)
By Euan Rocha and John Tilak
TORONTO Oct 20 (Reuters) - Shares of the nascent medical marijuana industry surged as much as 8 percent on Tuesday after Canada's Liberal leader Justin Trudeau, who has vowed to legalize marijuana, secured a historic victory in the federal election.
The Liberals swept to power with a clear majority, paving the way for Trudeau to work on legislation that would let marijuana companies focused on the small medical sector to expand into the much larger recreational market.
"If the recreational market suddenly had a framework and it was legal tomorrow the uptake from Canadians would be very, very quick," said Dundee analyst Aaron Salz.
The Canadian medical marijuana market is currently estimated to be worth C$80 million to C$100 million annually. Opening the market to recreational users, that value could rapidly jump to C$2 billion to C$5 billion, said Salz.
TSX Venture-listed Canopy Growth, the first company to go public in the sector in Canada last year under the name Tweed Marijuana, rose 7 percent to C$2.33. Mettrum Health and Aphria, rose 8 percent and 5 percent, respectively.
"The Liberals have emphasized their desire to legalize, regulate, and tax marijuana, and with the majority government now in place, this is obviously positive for the publicly listed licensed producers," said M Partners analyst Daniel Pearlstein.
Bankers and executives adopted a cautious stance and were not breaking out the bubbly just yet. Continued...