The market may have surged higher on Thursday but that was nothing compared to the gain made by the Creso Pharma Ltd (ASX: CPH) share price.
The cannabis company's shares rocketed a whopping 47% higher to 26 cents.
Why did the Creso Pharma share price rocket higher?
Investors were buying the company's shares on Thursday after the Democrats won the Georgia Senate run-off, effectively handing control of the Senate to them.
This could be good news for Creso Pharma and other cannabis companies because of President elect Joe Biden's policies.
During the election campaign, Biden's team showed their support for cannabis decriminalisation, with Chuck Schumer stating that legalisation would be a major priority in a Democratic controlled Senate.
Given that the Senate is now controlled by the Democrats, there could soon be meaningful cannabis policy reforms. And this could come sooner than you might expect, given concerns that the Republicans could take back a seat next year at the mid terms.
Forbes commented: "Make no mistake, the window for reform is likely a short one. While the Republican party rank and file are in majority support of legalization, GOP leadership in Congress, and Mitch McConnell in particular, has been no supporter of legalization."
"Historically, the party in control of the White House tends to lose seats during a mid-term election, particularly when they Control all branches of the federal government. Democrats must govern under the assumption that Republicans will take back at least one chamber of Congress in the 2022 midterm elections. If they retake the Senate and Mitch McConnell reassumes his role as Majority Leader, any hope of significant cannabis reform will likely go out the window."
This bodes well for Creso Pharma and goes some way to explaining why its shares smoked the market yesterday.
Though, it is worth remembering that the company is just one of a growing number of companies looking to take advantage of potential changes to legislation.
