Jan.1 2018, California officially became the nation’s largest, legal cannabis market. That’s good news for all cannabis business in the state and nationwide, but also good news for any company that has gone public.
Per Market Watch
Most of the cannabis-linked companies in North America are out of Canada, which legalized medical marijuana use in 2001, with shares of names like Canopy Growth Corp. WEED, -14.86% up 8.8% at the close. The Smith Falls, Ontario, outfit is a medical marijuana supplier founded in 2009.
Horizons Marijuana Life Sciences Index HMMJ, -12.13% which kicked off trade on the Toronto Stock Exchange last month, and intends on tracking more than 20 marijuana-related companies in North America, ended up 12%. Toronto-based Supreme Cannabis Co. Inc. SPRWF, -14.68% engaged in development and distribution of medical marijuana, was 19% higher, while Vancouver-based medical marijuana company Aurora Cannabis Inc. ACBFF, -13.35% rose 24%.
Although there are only a handful of marijuana plays in the U.S., the group is getting a healthy lift.
Nevada-based Cannabis Sativa Inc. CBDS, -26.08% which is involved in research, development and licensing of marijuana products, closed 16% higher. Here’s a table of some other U.S. companies, which have tended to be small to microcap entities:
Meanwhile, shares of ETFMG Alternative Harvest ETF MJX, -8.29% finished 9% higher on Tuesday. The fund back in December switched from tracking companies involved in Latin American real estate to one following an index of cannabis companies in the U.S.
Formerly known as Tierra XP Latin America Real Estate ETF and sponsored by ETF Managers Group, the fund is tracking the Prime Alternative Index. That includes names like Cronos Group Inc. MJN, -12.53% Canopy, Medreleaf Corp., Aurora, Canntrust Holdings Inc., GW Pharmaceuticals PLC. GWPH, +0.03% Insys Therapeutics Inc. INSY, -16.81% CanniMed Therapeutics Inc. CMED, -7.58% Turning Point Brands Inc. TPB, -1.98% and Huabao International Holding.
According to FactSet, the company is till composed of Latin America real estate entities, with a $45 million market capitalization and an expense ratio, a measure of costs of owning the fund, at 0.75%.
Legalized marijuana is viewed as a multibillion-dollar industry, and 29 U.S. states now allow the use of cannabis in some form. The market is estimated to generate some $23 billion in sales by 2021, according to data from ArcView Group, which provides financing and research for Cannabis outfits. The California law that took effect on Monday says adults 21 and older can possess up to an ounce marijuana drug and can grow up to six marijuana plants at home.
Many potential stock holders still have concerns about U.S. Attorney General Jeff Sessions and how his issues with cannabis could capsize the whole ship. For right now, buy away.