Cannabis stocks were mostly trading lower Wednesday and for good reason: a "blue wave" result from Tuesday's presidential election isn't going to transpire, CNBC's Jim Cramer said on "Squawk on the Street."

What Happened: Heading into Tuesday's election, a major Democratic victory across multiple branches of the government was considered to be a major catalyst for cannabis stocks.

"There was a belief that a blue wave would immediately mean that everybody can start smoking recreationally and drinking," Cramer said.

Arizona, Montana, South Dakota and New Jersey all legalized recreational marijuana on Tuesday.

Why It's Important: Many people were excited over the prospect of a Democratic-controlled House and Senate working with a Biden White House to quickly transform the weed sector into a "legitimate industry" but "that is not happening," according to Cramer.

Republicans retained key Senate seats, dashing Democrats' hopes to flip the Senate.

Here is a summary of how some of the more notable cannabis stocks were trading early Wednesday afternoon.

Aurora Cannabis Inc ACB 24.83% down 9.7% at $4.44.

Aphria Inc APHA 10.76% down 0.6% at $4.96.

Canopy Growth Corp CGC 10.01% down 5.9% at $19.24.

Cronos Group Inc CRON 13.31% down 6.7% at $5.64.

Tilray Inc TLRY 25.42% down 7.4% at $6.12.