Medical marijuana stocks soared Tuesday as investors wondered whether a Liberal majority means recreational pot will soon be legal in Canada.

Prime Minister-designate Justin Trudeau has voiced his support for the legalization and regulation of recreational marijuana.

Stocks in the sector had been on the rise ahead of Monday’s election, as a Liberal victory appeared more likely. Prices saw a double digit pop in the morning after the majority win, before easing.

Shares in TSX-listed Aphria Inc. closed at $1, up 5.26 per cent, while Mettrum Health Corp. gained 7.6 per cent to $1.98.

Canopy Growth Corp., which owns two of Canada’s biggest licensed marijuana producers, Tweed and Bedrocan shares closed at $2, up 8.26 per cent.

The company’s chairman Bruce Linton said the Liberal victory is a game-changer for Canada’s medical marijuana market.

“If you were to pick five years ago which one would be the first to federally permit recreational access, I’m not sure how many people would have bet on Canada,” he said.

If recreational use was legal his company would have access to a much larger market. It is an outcome he has been preparing for since he founded the company formerly called Tweed.

There are less than 40,000 Canadian medical marijuana patients, but the University of Ottawa estimates there are some 2.3 million recreational pot users.

A Supreme Court decision forced the Conservatives to make medical marijuana accessible to patients. Last year the Tories replaced a program that allowed patients to grow their own pot with a commercial medical marijuana market they said would be worth $1.3 billion.

However, the market has been hamstrung by red tape, quality control issues and the resistance of the medical community.

A viable recreational marijuana market in Canada is at least a year or two away as the government has to figure out taxation, dispensation and other regulatory overhauls, said Khurram Malik, an analyst at Jacob Securities.

“But in the interim I think small tweaks to the medical market will considerably increase demand which is what we’re all waiting for.”

Malik believes a Trudeau government could liberalize the existing medical marijuana program in the short-term to make it more compatible with a long-term plan. Those tweaks could include increased advertising, third-party dispensaries and an easier path to prescriptions.

Pharmaceutical and insurance companies will more seriously consider a move into the marijuana market now that a major barrier — the anti-marijuana Conservative party—has been removed, Malik said.

On Tuesday Canadian Cannabis Corp. announced it will buy Hydropothecary Corp., a licensed producer of cannabis and cannabis oils for $28 million.

Malik said the takeover had been in the works for a while and the announcement was timed to the election. He added that the increased valuations of marijuana companies is likely to result in more consolidation activity in the sector.

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The election results have also made some recreational pot companies that operate in the U.S. reconsider expansion to Canada.

The Canadian medical marijuana market is simply too small for consideration, said Don Robinson, CEO of Golden Leaf Holdings, a cannabis oil producer.

“But if Canada legalizes recreationally then the market becomes much bigger and much more attractive.”