A lot of people have been licking their chops in the preparation of investing in the legal marijuana industry. Though there’s still a lot of sketchy legal framework surrounding it, the industry itself has been blowing up. In the handful of states where cannabis has been legalized, it already has crossed the billion-dollar threshold in sales. That’s catching the attention of everyone — policymakers, entrepreneurs, and investors.
What does it mean for you? You could get your hands on some marijuana stocks, as a start, and possibly make a huge return over the long haul. And wouldn’t you know it, but for the first time, a medical marijuana ETF — the Horizons Medical Marijuana Life Sciences ETF (HMMJ) — is up for trading.
An ETF is an exchange-traded fund, which is a security that trades like a stock and tracks like an index, or bundle of assets. They’re similar to a mutual fund, but there are some differences. Basically, it allows you to invest in the cannabis industry and dilute your risk by purchasing stock in numerous companies, not just one. The Horizons ETF is composed of 14 medical marijuana stocks, 10 of which are based in Canada.
The key is this new ETF is a new way to get a foothold in the cannabis market. With sales not expected to slow down (barring some legal action by the federal government), the ETF presents a great opportunity to make some real money.
“The Index selects from a current universe of companies that have operations that may include one or more of biopharmaceuticals, medical manufacturing, distribution, bioproducts and other ancillary businesses, related to the marijuana industry,” a Horizons press release said.
“Only stocks that meet minimum asset and liquidity thresholds are eligible for inclusion in the Index. Stocks are rebalanced quarterly on a market-capitalization basis, and capped so that no single stock can exceed 10% of the weight of the Index when rebalanced,” the release continued.
Here are the 10 companies that make up the lion’s share of HMMJ — and what you need to know about them.