What happened

Wednesday is shaping up to be a great day for cannabis investors. Marijuana stocks are soaring following election results on Tuesday that have the potential to reshape the industry.

Here's how some of the more popular cannabis stocks are performing as of 10:30 a.m. EST:

So what 

It's looking increasingly likely that the Democrats will be able to win two Senate seats in crucial runoff elections in Georgia. Multiple news outlets have declared Democratic candidate Raphael Warnock the winner against Republican Sen. Kelly Loeffler. Meanwhile, Democratic candidate Jon Ossoff has a slight lead over Republican Sen. David Perdue. 

A rising stock chart is superimposed on cannabis plants.

Investors bid up Cannabis stocks on Wednesday. Image source: Getty Images.

Should the Democrats pick up both seats, they would effectively gain control over the Senate. At that point, the Democrats and Republicans would each have 50 Senate seats, which would give Vice President-elect Kamala Harris the ability to cast a tie-breaking vote once she and President-elect Joe Biden take office on Jan. 20.  

Now what

Marijuana producers and dispensaries -- including Sundial, Cronos Group, OrganiGram, Curaleaf, and Village Farms -- would all benefit if the Democrats win the Senate.

Biden and Harris have promised to decriminalize marijuana, which would make it easier for cannabis companies to operate in the U.S. As an example, banks would no doubt be more willing to lend and offer cash management services to cannabis companies if it's no longer a federal crime to do so.

Decriminalization would also be a boon for companies like GrowGeneration, which, while not marijuana producers themselves, help to support the industry's growth. Demand for GrowGeneration's hydroponic and organic gardening supplies would rise if marijuana were decriminalized, and these rising sales, in turn, could help to drive its stock price even higher.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.