(Bloomberg) -- Cannabis short-sellers may have had a slightly nauseating week after losing hundreds of millions of dollars during Wednesday’s midterm-induced optimism before gaining nearly all of it back during Thursday’s sell-off.

Pot shorts lost $292 million Wednesday, when stocks rose following the U.S. midterm elections, according to data from financial analytics firm S3 Partners. The midterms were broadly seen as positive for the cannabis industry and the stocks got a further boost from the resignation of anti-marijuana Attorney General Jeff Sessions.

Short-sellers barely had time to nurse their losses before they were reversed, however. Stocks retreated Thursday as analysts said Sessions’ departure will have little near-term impact on U.S. cannabis policy, resulting in $265 million of short-seller gains. Stocks continued to fall Friday, with the Horizons Marijuana Life Sciences Index ETF down as much as 5.8 percent.

It remains very expensive to short pot stocks. The average borrow fee is 13.4 percent, with Tilray Inc. costing 38 percent to short, Cronos Group Inc. at 42 percent and The Green Organic Dutchman Holdings Ltd. at 50 percent, S3 said.

Total short interest in the cannabis space is $3.35 billion, with about $1.4 billion of that added since mid-year.

“We can expect more days of high volatility in cannabis as hopes for legalized U.S. marijuana sales grows with the newly elected Democratic majority in the House of Representatives,” Ihor Dusaniwsky, managing director for predictive analytics at S3, wrote in a note. “Along with these high hopes and spikes in stock prices are more days of price reversals, which will entice shorter-term momentum short sellers to jump in and out of the market.”

To contact the reporter on this story: Kristine Owram in Toronto at kowram@bloomberg.net

To contact the editor responsible for this story: Courtney Dentch at cdentch1@bloomberg.net

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