File Photo of Canada Prime Minister Justin Trudeau.
Justin Trudeau's election win gave Canadian pot stocks a boost Tuesday with his promise to legalize recreational cannabis expected to give a boost to the nation's nascent medical marijuana industry.
Share prices for cannabis producers jumped an average of five to 10 percent in relatively high volume trading early in the day.
The companies already produce marijuana for medical use in Canada, and investors are betting they could quickly scale up to serve recreational pot users too, once Trudeau makes good on his promise.
Canopy Growth rose 11 percent to Can$2.43, while Aphria Inc. rose 5.3 per cent to Can$1 and Mettrum Health Corp. gained 6.0 percent to Can$1.95.
"Trudeau's vow to legalize and regulate marijuana... has set in motion the single most important catalyst for the marijuana space," Dundee Capital Markets analyst Aaron Salz said in a Tuesday note to clients.
At least one company is also looking beyond Canada's borders hoping that G20 nations will adopt Canada's regulatory framework for pot, creating new markets for their wares.
Bruce Linton, who co-founded the firm Tweed, said he was betting on "significant growth" in the sector, as legitimate firms move into a space now dominated by black market growers and sellers, and offer buyers a large variety of pesticide-free strains.
Linton's company opened in a former chocolate factory an hour's drive from Ottawa last year under a new government scheme that banned home cultivation in favor of large commercial greenhouses.
It merged with Canopy and Bedrocan in the spring to form the largest commercial pot grower in Canada. The parent company changed its name to Canopy in September.
Tweed was one of only six firms initially licensed by Health Canada to grow and sell fresh medical marijuana and cannabis oil to eligible persons. The number of licenses issued has since grown to 26.
An estimated one million out of Canada's 35 million people regularly smoke marijuana, according to 2014 surveys.
Trudeau has admitted he smoked the drug at a dinner party with friends after being elected to parliament in 2008.
He said his late brother Michel was facing marijuana possession charges for a "tiny amount" of pot before his death in an avalanche in 1998. This influenced his decision to call for legalizing and regulating cannabis, Trudeau has said.