Jim Cramer explains why many cannabis stocks were lower Wednesday morning

Jim Cramer explains why many cannabis stocks were lower Wednesday morning thumbnail

CNBC’s Jim Cramer explains how the election results are impacting some of the big cannabis stocks. For access to live and exclusive video from CNBC subscribe to CNBC PRO:

Oregon on Wednesday became the first state to legalize the active ingredient in so-called magic mushrooms on an election night that saw more states ease restrictions on recreational drugs across the country.

Oregon’s Measure 109 will give legal access to psilocybin, the main active ingredient in “magic mushrooms,” for mental health treatment in supervised settings. As of Wednesday at about 6 a.m. ET, the measure was passing with 55.8% support and over 2 million votes cast, according to Oregon’s Secretary of State.

While some cities have moved to legalize and regulate access to the drug, Oregon will become the first state in the country to legalize it on a statewide basis if the measure passes and becomes law. Supporters of the measure point to the medical benefits of the drug, which has been shown in some studies to benefit trauma survivors.

Through Measure 110, which has captured more than 58% of the vote so far, Oregon would also decriminalize the possession of small amounts of some hard drugs, including heroin and LSD. Instead of criminal prosecution, people in possession would face a $100 fine, which can be waived if the person agrees to pursue treatment, according to the measure.

In an election year like no other, Oregon is just one of several jurisdictions that drug deregulation advocates are cheering.

In the District of Columbia, voters elected to decriminalize the use of magic mushrooms and other psychedelic substances with the passage of Initiative 81. As of about 2 a.m. ET, the initiative had passed with a landslide 76.3% of the vote.

The measure will still face hurdles before it becomes law. Next, the D.C. Council will review the measure with the option to overturn it or send it on to Congress. Congress then has 30 legislative days to block the measure or allow it to become law.

A spokesman for the American Psychological Association said the organization does not have a stance on either the legalization or decriminalization of psychedelic drugs.

In addition to psychedelics, a number of states asked voters to choose a path forward for the regulation of marijuana. In New Jersey and Arizona, voters elected to legalize recreational use of marijuana.

In South Dakota, voters passed one of two marijuana ballot measures, making the drug available on a medical basis across the state. And in Mississippi, a majority of voters approved an initiative that would set up a medical marijuana program for patients with debilitating conditions.

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