The cannabis market has remained extremely lucrative over the course of the past several years of the industry. With new regulations going into place and the public opinion of the substance changing rapidly, it seems as though more and more companies are able to move to the forefront of the space. One of the interesting aspects of investing in cannabis has remained the pull of ETFs. ETFs offer a new way to invest in the space due to the broad nature of the investment and the exposure they offer to the market.
The ETFMG Alternative Harvest ETF (NYSEMKT:MJ) has been one of the most prominent ETFs in the space. The ETF has managed to secure its role as the first-moving marijuana fund to be traded based on cannabis in the U.S. The fund has already managed to pull in as much as $700 million in assets which is quite a large amount considering where the cannabis space was only a year or two prior. The recent gains in value and notoriety in the market have also meant that the fund has been able to move forward with new investments into the space. The ETF holds around 40 stocks, interestingly enough however, many of the stocks in the ETF do not wholly have to do with the growing of cannabis. This is what makes the fund so broad and helps to give investors a less volatile way to invest in a market that can sometimes have too many fluctuations more many investors. The ETF is comprised of pharmaceutical and biotech companies that deal with issues within the cannabis space, and helps to give the fund more potential for growth into the future.
The biggest holding of the company comes from the popular cannabis stock, Tilray (NASDAQ:TLRY). The ETF owns around 500,000 shares of the company worth upwards of $75 million as of the first of this month. Investors have been moving into Tilray due to their listing on such a prestigious U.S. exchange, but the fluctuations in the stock have meant high volatility for many investors. This level of volatility is inherently present in infant markets such as that of the cannabis space. Much of the rise of the company as of recent has come from the impending recreational sales of cannabis throughout the Canadian market that is expected to hit the streets as soon as October 17th. Given that the market is undoubtedly in its infant stages as mentioned prior, much of it is trading off of speculation. The hopes are that this can begin to calm down as the industry is able to move forward in its timeline into the future.
Only time will tell how well the cannabis space can continue to do amidst stringent regulations around the world and the changing atmosphere of the industry as a whole. The hopes are high that cannabis as a market can continue to change peoples opinions and given the public the option to use it as a substance in the coming years.
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