Good Friday. Here is today’s memo:
Today | 4 items
1. How to invest in cannabis (reader question)
This is a new and developing market. If you are going to put money at risk it needs to be money you can afford to lose.
In addition, you need to have a 10 year+ time frame. If the upside in this industry is as large as people think it is, it will take time to develop and grow.
One thing to keep in mind.
In the U.S., while cannabis is legal in a handful of states, it’s still illegal at the federal level. Some banks and brokerages won’t take the legal and reputational risk of holding stocks that are illegal at the federal level.
Most of the investment products available for retail investors are based out of Canada and trade on their TSX exchange. Recreational marijuana will be legal in Canada sometime this fall, possibly August or September.
I am still new to this space and don’t have any insights yet. I will report what I am reading and a few investment options for you to look at.
The largest ETF in this space is ETFMG Alternative Harvest ETF (ticker MJ) with $300 million + in AUM. You can buy this ETF at most U.S. brokerages.
The management fee is 0.75% or 75 basis points. For every $100 invested, you pay 75 cents.
Here are the top 10 holdings: