Voters in Arizona and New Jersey approved ballot measures to legalize recreational marijuana while South Dakota approved the use of cannabis for both recreational and medical purposes.

As investors still await results from Montana and Mississippi, Cowen analyst Vivien Azer noted the need to focus on about 30% upside to TAM that comes from State-level progress.

“TAM expands by more than $3 bn [to $34 bn], given adult use progress in AZ and NJ, coupled with positive outcomes in MT and SD,” Azer wrote in a note on Wednesday.

Pablo Zuanic, an analyst at Cantor Fitzgerald, believes that Curaleaf (OTC: CURLF) is a clear beneficiary of recreational approval in NJ, while Harvest Health (OTC: HRVSF) is also likely to benefit as it generates 50% of sales from AZ.

In a note sent to clients this morning, Zuanic focused on the election results and different scenarios, as well as their impact on the cannabis sector. In this context, he focused on three elements:

1) The fact that all states voting for rec MJ approved it, and other neighboring states may follow;

2) While the Senate blue wave has not happened, Zuanic counts 8 Republican Senators now being from rec states (MT, SD, AK, and MI one or two) that may be supportive of MJ reform;

3) As Democrats allegedly having a better shot at the WH than taking control of the Senate, Zuanic sees the combination of a Democrat WH and House control, and perhaps a very tight Senate as positive developments for federal level cannabis reform.

“Sure, if Republicans keep control of the WH and Senate, then major reform may be unlikely. The only caveat to this point would be, a) with potentially close to 20 states having rec programs in 1-2 years, could that put pressure on a Republican Senate to pass some type of reform? and, b) could cannabis be one of the few areas where Republicans and Democrats can find common ground?”, the analyst said.

Zuanic rates CURLF as “Overweight” and HRVSF as “Neutral”.

Despite the positive news on recreational marijuana a number of the large cannabis stocks are lower in pre-open trading, including Canopy Growth (NYSE: CGC) (-2.5%), Tilray, Inc. (NASDAQ: TLRY) (-4.4%), Cronos Group Inc. (NASDAQ: CRON) (-2.8%), and Aurora Cannabis Inc. (NYSE: ACB).