Seems there’s been a run on marijuana as folks stuck at home look for some relief:

Shares in most of the big cannabis companies are up sharply this week following reports of a spike in demand as consumers attempt to stock up in fear of a dragged-out shutdown of stores throughout the U. S.

I’ve touted in earlier posts that rather than try to pick the winners in Canada, I preferred to own an ETF that holds the key stocks in the sector.  The HORIZONS MARIJUANA LIFE SCIENCES ETF (HMMJ ON TSX) was the Canadian ETF I’d discussed at the time.  Here’s a list of its top 10 holdings:

HMMJ Top Holdings

It’s been creeping up in value since mid-March and to me looks like the bottom is history with more upside potential.

The U.S. ETF I highlighted at the time, the ETFMG Alternative Harvest ETF (MJ on NYSE) has a similar array of top holdings listed below.

MJ Top Holdings

So basically you own the one in the currency that’s most convenient, if you choose to own a collection of cannabis plays at all.  I prefer the ETF’s simply because I can’t pretend to predict which companies will thrive and which will dive.  This industry has certainly had its bumps and grinds, but it is inevitable that things will settle down, some consolidation will take place and serious managers will continue to replace the promoters that got things rolling. Coronavirus has consumers ‘stocking up’ on their favorite buzz-maker, which bodes well for the financial results for some key companies in the industry.


About the Author

Malvin Spooner is a veteran money manager, former CEO of award-winning investment fund management boutique he founded. He authored A Maverick Investor's Guidebook which blends his experience touring across the heartland in the United States with valuable investing tips and stories. He has been quoted and published for many years in business journals, newspapers and has been featured on many television programs over his career. An avid motorcycle enthusiast, and known across Canada as a part-time musician performing rock ‘n’ roll for charity, Mal is known for his candour and non-traditional (‘maverick’) thinking when discussing financial markets. His previous book published by Insomniac Press — Resources Rock: How to Invest in the Next Global Boom in Natural Resources which he authored with Pamela Clark — predicted the resources boom back in early 2004.

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