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Why Cannabis Stocks & ETFs Are Soaring

Neena Mishra
·2 min read

Marijuana stocks have rallied in the past few weeks thanks mainly to rising possibility of a Biden victory in the presidential election. A Biden administration is expected to support decriminalization of recreational marijuana and legalization of medicinal marijuana at the federal level.

Medical use of marijuana is now legal in 33 states and in the District of Columbia, while its recreational use is legal in 11 states and DC. Some more states are expected to legalize marijuana’s recreational use soon.

Cannabis however remains illegal at the federal level. That results in major challenges for US marijuana companies. 

A “Blue Sweep” could therefore be a game changer for the cannabis industry, which is growing rapidly. We could see a boom in domestic production. In fact, most Americans support marijuana legalization, but the industry is evolving rapidly and therefore these stocks are very volatile.

2019 was a terrible year for most pot stocks and the underperformance continued earlier this year. ETFs lower the risk of investing in this high-risk, high-reward industry.

The ETFMG Alternative Harvest ETF (MJ) is the first and largest US listed ETF to target the global cannabis industry. Canopy Growth (CGC), Cronos (CRON) and Aurora Cannabis (ACB) are its top holdings. The Cannabis ETF (THCX) and the Global X Cannabis ETF (POTX) are also passively managed.

The AdvisorShares Pure Cannabis ETF (YOLO), the Cambria Cannabis ETF (TOKE) and the Amplify Seymour Cannabis ETF (CNBS) are actively managed. TOKE is the cheapest pot ETF. The newest product in the space-- AdvisorShares Pure US Cannabis ETF (MSOS)--is an actively managed ETF that focuses exclusively on US cannabis stocks and swap contracts.

To learn more about these ETFs and their performance, please watch the short video above.

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GW Pharmaceuticals PLC (GWPH) : Free Stock Analysis Report
 
Canopy Growth Corporation (CGC) : Free Stock Analysis Report
 
Cronos Group Inc. (CRON) : Free Stock Analysis Report
 
Aurora Cannabis Inc. (ACB) : Free Stock Analysis Report
 
ETFMG Alternative Harvest ETF (MJ): ETF Research Reports
 
AdvisorShares Pure Cannabis ETF (YOLO): ETF Research Reports
 
Cambria Cannabis ETF (TOKE): ETF Research Reports
 
Amplify Seymour Cannabis ETF (CNBS): ETF Research Reports
 
AdvisorShares Pure US Cannabis ETF (MSOS): ETF Research Reports
 
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Zacks Investment Research
 
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