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Marijuana ETF Tops $1 Billion in AUM

This article was originally published on ETFTrends.com.

The ETFMG Alternative Harvest ETF (MJ) , the first and currently still the only dedicated cannabis exchange traded fund listed in the U.S., recently topped $1 billion in assets under management.

To be precise, MJ had $1.01 billion in assets under management as of Monday, Feb. 4 th , according to issuer data.

As the rules and regulations around marijuana begin to loosen, with improving sentiment on the recreational usage on the once highly guarded drug, more businesses are starting to dabble and expand the cannabis industry, and investors can also access the growth opportunity through related exchange traded fund strategies.

Entering Tuesday, MJ was up 49.44% year-to-date, easily making it one of 2019 best-performing non-leveraged ETFs.

What's Fueling Cannabis Growth

The ETFMG Alternative Harvest ETF includes a hefty tilt toward Canadian companies, along with a smaller position in U.S. companies. Canada, which recently legalized marijuana for recreational purposes, has several dedicated cannabis ETFs trading there.

In the U.S., MJ is getting a lift from speculation that more states will legalize marijuana for either recreational or medicinal use and that Congress and the White House could soften their stances on the drug being illegal at the federal level. California, Colorado, Nevada and Washington are among the states with thriving legal cannabis industries.

Some anecdotes suggest millennial investors are enthralled with cannabis stocks.

“And apparently, millennials who use the RobinHood free stock-trading app have taken this advice to heart. According to Business Insider, shares of Aurora Cannabis, the Canadian cannabis producer, are now more popular among the app's (mostly millennial) users than Apple,” reports ZeroHedge.

Auro Cannabis is MJ's third-largest holding. Though it is the dominant cannabis ETF in the U.S., MJ has some competition, including the actively managed AdvisorShares Vice ETF (ACT) , which includes a smaller tilt toward the industry.

While not solely targeting the cannabis industry, the AdvisorShares Vice ETF includes companies that derive at least 50% of their net revenue from the marijuana and hemp industry or have at least 50% of their company assets dedicated to lawful research and development of cannabis or cannabinoid-related products.

Investors have added $113.56 million to MJ this year.

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