Five state-level marijuana initiatives were on the ballot this election cycle and all five garnered enough support to pass, setting the U.S. cannabis sector up to grow by an additional $9 billion over the next five years, according to one industry tracker.

While that’s certainly a boost and a dream scenario for cannabis investors when it comes to how the state ballot measures could’ve gone, the hope that Senate control would flip to more cannabis-friendly Democrats is fading.

Should Republicans maintain control of the Senate as they look poised to do, as more races are officially called, that would seemingly dampen the odds of legalizing cannabis at a federal level through the Kamala Harris-backed Marijuana Opportunity Reinvestment and Expungement (MORE) Act. That fact appeared to weigh more heavily on Canadian cannabis companies looking to expand into the much larger U.S. cannabis market. Canopy Growth (CGC) shares dropped nearly 7%, while Aurora Cannabis (ACB) shares shed about 10%.

U.S.-based multi-state operators, however, like Chicago-based Green Thumb Industries and Cresco Labs, both fared much better, ending the post-election-day session in the green. That could be because more state legislatures might now feel the pressure to legalize as well, according to Cowen Managing Director Vivien Azer.

“I find it particularly encouraging. As we saw in 2016 and again in 2020 cannabis continues to be a bipartisan issue and we were positively surprised by the outcomes in Montana and South Dakota,” she told Yahoo Finance, calling it another “good year” for cannabis.

Recreational cannabis coming online in Arizona and New Jersey would be a major boost to the U.S. market next year, especially with companies like Green Thumb Industries and Acreage Holdings already operating in the state. That growth and runway ahead makes the relative attractiveness for many U.S. operators stand out even more compared to Canadian counterparts.

“I think the U.S. valuations are far more compelling than the Canadians,” she said. “They are still trading at substantial discounts despite the fact that the addressable market in the U.S. is multiple times bigger than Canada and the best in class U.S. operators are far more profitable than the Canadians.”

If there is one downside to not seeing a blue wave, it’s that the heavy tax burden on U.S. multi-state operators is unlikely to be lifted. Because cannabis remains federally illegal as a Schedule-I drug, companies are often saddled with effective tax rates that can be higher than 50%. Rescheduling cannabis and revamping federal tax laws that could come in a comprehensive cannabis bill like the MORE Act would significantly reduce that tax cost.