Summary
The global medical marijuana market is projected to reach $55.8 billion by 2025, according to Markets and Research.
The ETFMG Alternative Harvest ETF has advanced 8% YTD vs. 3% for the S&P.
Horizons Marijuana Life Sciences ETF, lit up 14% YTD.
If U.S. investors follow in the footsteps of their Canadian counterparts, the ETFMG Alternative Harvest ETF (MJX) should grow like a weed. The Horizons Medical Marijuana Life Sciences ETF, listed on the Toronto stock exchange, has attracted roughly $554 million USD (690 million CAD) since it debuted in April.
“I see this as something like the early days of the internet where many companies failed and a few grew into massive success stories,” says Anthony Welch, president of Sarasota Capital Strategies in Osprey, Fla. “As with the internet, the makeup of a cannabis fund today will look much different than the same fund 20 years from now.”
The ETFMG Alternative Harvest ETF, which rolled out Dec. 26, has advanced 8% year to date versus 3% for the S&P 500, through Jan. 16, according to Morningstar. Its Canadian counterpart with many overlapping holdings, the Horizons Marijuana Life Sciences ETF, lit up 14% year to date. It trades over the counter in the U.S. under the ticker HMLSF.
The ETFMG Alternative Harvest ETF tracks 30 companies “likely to benefit from the increasing global acceptance of various uses of the cannabis plant.” Don’t jump aboard unless you like roller coasters because it will likely be very volatile.
Market Potential Bigger Than Cable
ArcView Market Research projects the compounded annual growth rate, CAGR, of the so-called green rush will be faster than cable TV in the 1990s. The firm forecasts the North American cannabis market will go from $6.7 billion in 2016 to $22.6 billion in 2021 — an eye-popping CAGR of 27%.
credit:seekingalpha.com