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Should You Buy a Cannabis ETF?

Tracey Ryniec
  • (0:35) - Marijuana Stock Explosion
  • (3:15) - ETFs Targeting The Cannabis Industry 
  • (14:45) - Top Holdings In The Current Marijuana ETFs
  • (18:30) - What Are Pro’s and Con’s of Investing In An Cannabis ETF?
  • (24:50) - Episode Roundup: MJ, YOLO, THCX, CNBS, TOKE

 

Welcome to Episode #186 of the Zacks Market Edge Podcast.

Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.

This week she’s joined by Zacks Director of ETF Research, Neena Mishra, to talk about one of the hottest topics in ETFs: the cannabis ETFs.

For the past 2 years there has only been on player: the ETFMG Alternative Harvest ETF MJ. It used to be a Latin America real estate fund but in Dec 2017, it was changed to a cannabis fund.

Because it was the first one “in” it now has a market cap of over $1.1 billion.

The SEC was not amused by the sudden change in the fund’s purpose, however. Since it’s appearance, the SEC has put tough restrictions on companies who wanted to launch their own cannabis ETFs.

But finally, after months of vetting, some competitors have launched this year.

Two New Launches in 2019

1.       AdvisorShares Pure Cannabis ETF YOLO debuted in April 2019. This fund differs from MJ in that it is an actively managed fund and it is “pure” with companies that derive most of their revenue from cannabis. It’s largest holding is OrganiGram Holdings versus MJ’s largest holding of GW Pharmaceuticals.

2.       The Cannabis ETF THCX is just days old. This passively managed fund has 35 holdings. It has the cheapest expense ratio at 0.7%. It’s largest holding differs from the other two funds as it is Tilray TLRY, followed by Cronos Group CRON.

Amplify is set to launch its own actively managed cannabis ETF shortly and a fifth fund is also expected under the ticker, TOKE, in the coming weeks.

Should investors be diving into the pot stocks through these ETFs?

Learn what the differences are between them, and the pros and cons of ETF investing, on this week’s podcast.

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.

See the pot trades we're targeting>>


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Cronos Group Inc. (CRON) : Free Stock Analysis Report
 
Tilray, Inc. (TLRY) : Free Stock Analysis Report
 
AdvisorShares Pure Cannabis ETF (YOLO): ETF Research Reports
 
THE-CANNABIS (THCX): ETF Research Reports
 
ETFMG Alternative Harvest ETF (MJ): ETF Research Reports
 
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