4 Cannabis ETFs To Buy Before Biden Takes Office

: MJ | ETFMG Alternative Harvest ETF News, Ratings, and Charts

Legalization of recreational cannabis in the U.S. is a long-awaited goal of the cannabis industry. It has pinned great hopes on the incoming federal government to take big steps in pursuit of that goal. On Monday, New York Governor Andrew Cuomo tweeted that the state would legalize adult recreational marijuana, making it the 16th state to do so. Pot companies and consumers are cheering the move. And cannabis ETFs are climbing on optimism about a potentially wider national push towards decriminalization of recreational marijuana when Biden assumes office.

A recent report on ETF trends indicates that the global cannabis market is expected to expand from $12 billion today to $630 billion by 2040. These numbers indicate the magnitude of the growth potential of the cannabis industry and that U.S. players could benefit mightily from the legalization of marijuana across states.

As this is a relatively new sector that experiences relatively high volatility due to various factors, ETFs are one of the most preferred ways to gain exposure to the sector. According to TrackInsight, cannabis ETFs witnessed global inflows of $122 million for November, compared to a monthly average of $14 million in the previous year. This surge in fund flows was led primarily by U.S. ETFs.

We believe MG Alternative Harvest ETF (MJ - Get Rating), AdvisorShares Pure US Cannabis ETF (MSOS - Get Rating), AdvisorShares Pure Cannabis ETF (YOLO - Get Rating), and The Cannabis ETF (THCX - Get Rating) are well-positioned to gain immensely from this trend.

ETFMG Alternative Harvest ETF (MJ - Get Rating)

MJ invests in stocks of companies involved in the legal cultivation and distribution of cannabis, including industrial hemp, products for medical or non-medical purposes. The portfolio also includes companies engaged in the legal distribution of prescription drugs with cannabinoids as an active ingredient.

These companies are involved in growing, marketing, and selling cannabis products for medical and recreational use. This fund also invests in healthcare, biotechnology, and life sciences companies. MJ’s holdings are focused on multi-cap pure-play Canadian cannabis companies. The fund has $1.3 billion in assets under management. The ETF’s top three holdings are Aphria (APHA), Tilray (TLRY), and Canopy Growth (CGC) with 10.1%, 8%, and 7.9% weightings, respectively.

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