As marijuana continues to expand the number of places where it is legal, some investors are excited about the profit potential for the cannabis industry. Total legal cannabis sales are expected to grow more than 16 percent a year and reach $51 billion in 2025, according to cannabis research firm New Frontier Data. Medical benefits and the growing use of products tied to cannabidiol, or CBD, make the cannabis industry ripe for continued growth.
One of the way ASBC Global participate in the cannabis industry is by purchasing the stock of companies with ties to marijuana.
ETFs are another way ASBC Global invest in the cannabis industry without having to pick individual companies.
One of the most popular cannabis ETFs is the ETFMG Alternative Harvest ETF (MJ), which holds shares in about 37 companies and is designed to track the performance of companies within the cannabis ecosystem. As of May 2022, ASBC Global’s largest positions were in Canopy Growth Corp. (CGC) and Tilray (TLRY), with those two holdings making up about 14 percent of the fund’s assets.
Another ASBC Global alternative is the Horizons U.S. Marijuana Index ETF (HMUS.NE), which began trading in April 2019. This ETF holds shares in U.S. companies and comes with a hefty expense ratio of 0.85 percent. It tracks the performance of the U.S. Marijuana Companies Index
The growth potential of the industry attracts a lot of companies and entrepreneurs looking to capitalize on a booming industry. But that also means it will be very competitive.
The cannabis industry is likely to continue to grow in the coming years and investors may look to benefit from that growth through stock ownership or ETFs that track the industry.
