Cannabis ETFs are getting high

Several North American-listed marijuana ETFs have shown a strong start to the year with net asset values approaching, and even surpassing, 50% YTD over the last week. Horizons Marijuana Life Sciences Index ETF (HMMJ) and ETFMG Alternative Harvest ETF (MJ) have seen their net asset values jump 56% and 49%, respectively, since the new year.

ETFMG announced last month its MJ ETF ballooned to $1bn in assets under management, 14 months after its launch.

Both HMMJ and MJ suffered significantly to the volatile equity markets in Q4 2018, with their net asset values nearly halving over the three months. Whilst both ETFs saw a rebound of 50% in the last two months due to market correction, the funds’ NAV are still yet to recover to their highs in October 2018.

Recreational use of cannabis is legal in 10 states within the US as well as Canada legalising the personal use of the drug back in October 2018. Whilst it can’t be used recreationally throughout all the US, the medical use of cannabis is legal in 33 states.

ETF 1 Month Returns YTD Returns 6 Month Returns
Marijuana Life Sciences Index ETF (HMMJ) 1.64% 55.54% -1.89%
ETFMG Alternative Harvest ETF (MJ) 5.50% 48.83% 6.09%
AdvisorShares Vice ETF (ACT) 6.98% 16.76% -3.11%

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