The Marijuana ETF (Exchange Traded Fund) has been initiated in Canada, in the sector that is rapidly growing thru out the world. Those who believe that medical cannabis has the potential to make money can invest in the HHMJ (Horizons Medical Marijuana Life Sciences) ETF, which last month started trading on the Toronto Stock Exchange.
By investing through an Exchange Traded Fund in the marijuana sector, you can diversify, and it is not nearly as risky as investing in one company in this industry. There is still an obvious risk in the sector.
The ETF Currently consists of sixteen companies and is based on the North American Medical Marijuana Index. Ten of these companies are located in Canada, since 2001, the use of therapeutic cannabis has been legal here. In 2016, revenues of $6.7 billion were generated in the North American market for medicinal marijuana; this was a 30% increase from the last year. Being as Canada on its way to legalizing the use of recreational marijuana this next year, this Exchange Traded Fund has the potential of becoming even more lucrative.
Trading with the HMMJ Exchange Traded Fund started at 10 CAD (Canadian Dollars), and it reached a peak in the following days of 12.40 CAD before it returned to the level it is currently at, around 9.60 CAD. And compared to others that were launched in the last few months, the Exchange Traded Fund is already setting records. Just a few of these include record average daily assets and volumes under management, these have reached close to 100 million CAD:
All in all, weed stocks are not considered to be as extravagant as they used to be about four years ago when this industry was just starting out. Although the market is loaded will penny stocks to date, there are now a few companies in this industry showing a strong long-term potential.
Because approximately $150 billion is spent on marijuana that is illegal, the opportunities are enormous as more and more states in the US and other countries start to legalize cannabis. As a matter of fact, most HMMJ ETF stocks have over the past year, already recovered a share growth of double digits. That being said, it is important to keep in mind that a lot of these companies, despite strong sales, have yet to turn a profit.
However, if you're looking to include an Exchange Traded Fund such as HMMJ in your portfolio, it is important to remember that in the years to come, anything can happen. Investing in a sector like this could bring about high profits; it does however also carry a significant risk.
The industry sector is at the caprice of governments, and it is still not clear what regulations and rules will be instituted around selling cannabis. Another aspect to keep in mind is that, if this particular Exchange Traded Fund is what you incest in, there is also the currency of security. This unique Exchange Traded Fund happens to be denominated in Canadian dollars.
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