Investing In The Cannabis Industry In 2021
In October the top marijuana stocks to buy have fallen to the lowest trading levels seen in 2021. For investors looking to invest in the cannabis sector, this could be time to start looking for ways to invest in one of the fastest-growing industries in the US. At the present time, it seems cannabis stocks are not reflecting the revenue growth delivered by leading cannabis companies in 2021. This is mostly due to the prolonging of federal marijuana legalization and reform.
But this could be an opportunity to establish long-term positions in an industry that is forecast to double in size in the next five years. One way some investors are gaining exposure to the cannabis market is with marijuana ETFs. For those not familiar with ETFs or exchange-traded funds this is a type of security that tracks an index, sector, commodity, or other assets. ETFs can be purchased and sold on a stock exchange, in the same manner, regular stocks are traded.
In general marijuana, ETFs are invested in the cannabis sector and could be a way to gain a broader exposure to an area of the market. In addition, some cannabis ETFs also provide a dividend for shareholders which is rarely in cannabis stocks. Because of this more investors have considered these ETF investments as a possible way to establish long-term positions in the cannabis market.
Forecast Growth Of The Cannabis Industry And Investing In Cannabis ETFs
Although we have not seen federal cannabis reform in 2021, we have seen many more states establish legalized cannabis rapidly expanding the market. Before investing it’s always important to do your own due diligence and research the best performing investments in the market. According to a recent BDSA report, US cannabis sales are forecast to surpass $24 billion in 2021.
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In addition, this report anticipates US cannabis sales could reach $47.6 billion in 2026. Global cannabis sales are also expected to grow from $30.6 billion in 2021 to $62.1 billion in 2026. For investors, these lower trading levels could be a good opportunity to invest in the cannabis industry. Let’s look at 4 of the best marijuana ETFs for your watchlist for long-term investments.
Best Marijuana ETFs To Watch In 2021
- AdvisorShares Pure US Cannabis ETF (NYSEArca: MSOS)
- ETFMG Alternative Harvest ETF (NYSEArca: MJ)
- Amplify ETF Trust – Amplify Seymour Cannabis ETF (NYSEArca: CNBS)
The AdvisorShares Pure US Cannabis ETF (MSOS)
First on the list is AdvisorShares Pure US Cannabis ETF the first US marijuana ETF to surpass $1 billion in assets under management. In general, this top marijuana ETF is focusing on US cannabis companies for their holdings and assets. Specifically, the ETF has assets that include US vertically integrated multi-state operators, top U.S. cannabis REITs, CBD companies, pharmaceutical companies, and hydroponic suppliers. For example, MSOS ETF’s majority holdings are in Trulieve Cannabis Corp. (TCNNF), Curaleaf Holdings, Inc. (CURLF), Green Thumb Industries Inc. (OTC: GTBIF), and Cresco Labs Inc. (OTC: CRLBF).
MSOS ETF is trading at $27.21 on October 28th down 17.25% in the last month. This ETF has a 52-week price range of $24.30-$55.91 and is down 25.86% year to date. In September AdvisorShares launched a psychedelics ETF AdvisorShares Psychedelics ETF (NYSEAcra:PSIL) adding to its ever-growing list of assets. MSOS ETF does not currently pay a dividend.
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ETFMG Alternative Harvest ETF (MJ)
Alternative Harvest ETF is one of the first and largest ETFs to target the cannabis market. At the present time, MJ ETF has net assets of $1.61 billion. In fact, MJ remains the largest cannabis ETF in the world and the first and only U.S.-listed ETF to target the global cannabis industry directly. Specifically, the MJ fund provides investors exposure to areas of the cannabis sector which continues to see medicinal advancements, regulatory changes, and M&A activity.
Currently, Alternative Harvest ETF major assets are in holdings from top Canadian cannabis companies like Tilray, Inc. (NASDAQ: TLRY), Canopy Growth Corporation (NASDAQ: CGC), and GrowGeneration Corp. (). For the long-term investor, MJ ETF has a dividend with an estimated 1.60% dividend yield. With a dividend, MJ ETF becomes a much more attractive long-term hold in the cannabis sector.
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Amplify Seymour Cannabis ETF (CNBS)
Next up is Amplify Seymour Cannabis ETF provides investors exposure to the global cannabis industry with more than 80% of its holdings in companies generating revenue from cannabis and hemp production. In recent events, this cannabis ETF announced it can access US MSOs via swaps Now with the addition of US cannabis companies CNBS has large holdings of WM Technology, Inc. (NASDAQ: MAPS), and Hydrofarm Holdings Group, Inc. (NASDAQ: HYFM). Also holding assets in Tilray, Inc. (NASDAQ: TLRY) and Village Farms International, Inc. (NASDAQ: VFF).
CNBS ETF is trading at $17.50 on October 28th down 14.27% in the last month. The ETF has a 52-week price range of $11.66-$40.65 and is up 34.73%% in the last six months. Amplify Seymour Cannabis ETF pays an annual dividend of $0.10 per share, with a dividend yield of 0.49%.
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