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This is how you will know if Attorney General Sessions is in real trouble

Jeff Sessions
Chip Somodevilla | Getty Images
Jeff Sessions

If the marijuana stocks start to rally big, then that would mean Wall Street believes there's a legitimate chance Attorney General Jeff Sessions may be facing serious consequences from his undisclosed meetings with the Russian ambassador during the 2016 presidential campaign.

Sessions is seen as not friendly to the growing legal marijuana movement in many states. Many of the stocks initially popped after the election of Donald Trump, but began to retreat when it became clear Sessions was on a track to be attorney general.

Here's Compass Point, a research and trading firm, in a note to clients Thursday morning:

"If AG Sessions if forced to resign, we believe there would be two sector-specific reactions. First, our sense is that the Trump Administration's immigration policy would remain intact, which suggests that beneficiaries of the increased deportation activity – most notably CoreCivic (CXW) and GEO Group (GEO) – would continue to benefit. Second, if AG Session does depart the medical cannabis industry – most notably Innovative Industrial (IIPR) – could benefit from a crystallized federal policy stance."

Innovative and many of the other so-called marijuana plays are under $100 million in market value and thinly traded, making them risky propositions for the regular investor.

Some of the bigger pot plays often given by investors are Scotts Miracle-Gro and GW Pharmaceuticals. Scotts was down slightly in early Thursday trading while GW was up more than 1 percent.

Democrats are demanding Sessions step down from his post after the news that he had two conversations with the Russian ambassador while he was a policy advisor to Trump. Then Sen. Sessions did not disclose those communications during his confirmation hearing. The

The Justice Department said there was nothing misleading about his answers during the confirmation and Sessions himself said Wednesday night that he had never met with Russian officials to "discuss issues of the campaign."

Compass also notes that if this could turn into a bigger worry that hits the whole market.

"We view this development as a headline negative for the market as it could conceivably balloon into a broader political scandal that would likely weigh on President Trump's already expansive agenda," states the note.

— With reporting by CNBC's Kayla Tausche.