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Investor interest in marijuana stocks continues to rise, particularly since the legalization of pot for recreational use in Canada last year. The ETFMG Alternative Harvest ETF (MJ - Free Report) is one of the best performing ETFs so far this year.

In the US, 33 states and the District of Columbia have legalized marijuana’s medical use and supply, and ten states now allow marijuana for recreational use but it remains illegal at the federal level.

A number of alcohol companies are investing in marijuana as alcohol consumption is going down in the US while cannabis consumption has been rising. Cannabis infused beverages are set to become legal in Canada later this year.

There is a rising interest in the medical benefits of marijuana too, particularly in areas like pain management and epilepsy treatment.

According to Barclays, the US cannabis market would be $28 billion if legalized today, growing to $41 billion by 2028. However, marijuana stocks are usually quite volatile. ETFs provide diversified exposure to this hot but volatile space.

MJ has been quite popular with investors and has gathered about $1.3 billion in assets, as it was the only ETF available to investors to play the cannabis craze. Its top holdings include GW Pharmaceuticals (GWPH - Free Report), Aurora Cannabis (ACB- Free Report), Canopy Growth (CGC- Free Report), Cronos (CRON - Free Report) and Tilray (TLRY - Free Report).

With the launch of actively managed AdvisorShares Pure Cannabis ETF (YOLO - Free Report) last month, investors have one more option to get exposure to this space. And there are some more pot ETFs in the pipeline.

To learn more about marijuana investing and these ETFs, please watch the short video above.