Investors believe there will be less shooting and more smoking under a post-Covid Joe Biden presidency.
Stocks of guns and ammo tumbled while marijuana companies sky-rocked following the results of the presidential election and the announcement of a highly effective coronavirus vaccine.
The lack of riots and civil unrest following the announcement of Mr Biden as the 46 President of the United States saw Smith & Wesson Brands and Sturm Ruger & Co fall more than nine per cent, while ammunition seller Vista Outdoor fell more than 12 per cent.
They were among several “stay-at-home” stocks that began dropping after Pfizer announced its coronavirus vaccine was highly effective in current trials, according to Reuters.
“If a vaccine that is 90% effective can truly bring COVID to an end, the return to work and school could subsequently bring sales in these categories back down to normalized levels,” Aegis Capital analyst Rommel Dionisio said in an email.
Marijuana companies, meanwhile, surged with Canopy Growth rising 10 per cent and Aurora Cannabis jumping 20 per cent after both reporter high sales and narrow losses.
Other cannabis stocks to rally after the weekend’s election result included Curaleaf, Aphria, Cronos and Tilray, according to CNN Business.
“We believe the Biden win is an important step on the path to federal permissibility of cannabis in the US market through decriminalization and descheduling,” the outlet reported Canopy CEO David Klein as saying on a conference call with analysts.
“The results of the ballot initiatives clearly showcase that support for adult-use marijuana legalization extends across geographic and party lines and is supported by a majority of Americans. Legal marijuana is becoming the American norm.”
Several states legalized the use of recreational marijuana during the election, including Arizona, Montana, New Jersey and South Dakota.
Aurora CEO Miguel Martin said the Biden-Harris position on marijuana was clear but that whoever controlled the Senate would have influence over legalization at the federal level.
Vice President-elect Kamala Harris famously admitted to smoking marijuana during a 2019 interview on The Breakfast Club radio show where she announced her support of legalizing the drug.
Ms Harris laughed with host Charlamagne Tha God and minimized her own marijuana use despite being responsible for 1,900 convictions for cannabis-related offences while a district attorney in California.