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Cannabis ETF Tops in January: 5 Stocks That Led the Way
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Global X Cannabis ETF topped the list of the best-performing ETFs in the first month of 2021 with impressive returns of about 46.5%.
The rally was primarily driven by legalization hopes in more U.S. states. The Biden government has the friendliest political environment for the cannabis industries in U.S. history. This is especially true, as the new government will expedite the legalization of marijuana at the federal level, thereby providing a boost to the U.S. industry.
Additionally, now with the Blue Wave, the markets are anticipating that the Marijuana Opportunity Reinvestment and Expungement (MORE) Act passed by the House in December will soon be approved by the Senate, which otherwise has lesser chance to pass. The bill aims to decriminalize cannabis at the national level for the first time, and remove cannabis from the list of federally controlled substances and erase certain federal convictions (read: ETFs to Watch as Biden Heads to White House).
Let’s take a closer look at the fundamentals of POTX.
POTX in Focus
This ETF seeks to invest in companies across the cannabis industry and tracks the Cannabis Index. The index includes companies involved in the legal production, growth and distribution of cannabis and industrial hemp, as well as those involved in providing financial services to the cannabis industry, pharmaceutical applications of cannabis, cannabidiol (i.e., CBD), or other related uses including but not limited to extracts, derivatives or synthetic versions.
The product holds 18 stocks in its basket with Canadian firms accounting for 75.3% of assets while the United States takes 12.2% share. It has accumulated $88.2 million in its asset base and trades in an average daily volume of 266,000 shares. The fund charges investors 50 bps in fees per year.
Though most of the stocks in the fund’s portfolio delivered strong returns, a few have gained more than 50% in the first month of 2021. Below we have highlighted the five best-performing stocks in the ETF with their respective positions in the fund’s basket:
Best-Performing Stocks of POTX
Tilray Inc. (TLRY - Free Report) : This Canada-based pharmaceutical company develops cannabis-based medicines, drugs, drops and oil products. Tilray occupies the top position in the fund’s basket with 13% allocation. It has gained about 112% in a month. The stock has a Zacks Rank #3 and Growth Score of B (read: 5 Sector ETFs That Outperformed in a Volatile January).
Corbus Pharmaceuticals Holdings Inc. (CRBP - Free Report) : This Massachusetts-based phase 3 clinical-stage pharmaceutical company is focused on the development and commercialization of novel therapeutics to treat rare, chronic, and serious inflammatory and fibrotic diseases. It has gained 75.6% in a month. The stock makes up for 4.5% share in POTX. It has a Zacks Rank #3 (Hold) and a Momentum Score of A.
Aphria Inc. : This Canada-based company produces, supplies and sells medical cannabis primarily in Canada. Aphria occupies the third position in the fund’s basket with 11.1% allocation. It has also delivered incredible returns of about 71% in a month. The stock has a Zacks Rank #3.
HEXO Corp. : This Quebec-based is a consumer-packaged goods cannabis company. The stock takes the seventh spot in the fund’s basket with 6% of the assets. It has gained 56.7% in a month. HEXO has a Zacks Rank #3 and Momentum Score of A (read: 5 Best-Performing Leveraged ETFs of January).
Canopy Growth Corporation (CGC - Free Report) : This Canada-based company offers dry cannabis and oil products primarily under the Tweed brand. The stock has surged more than 53% in a month. It currently carries a Zacks Rank #4 (Sell) and takes the fifth spot, accounting for 8.7% of total assets.
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Cannabis ETF Tops in January: 5 Stocks That Led the Way
Global X Cannabis ETF topped the list of the best-performing ETFs in the first month of 2021 with impressive returns of about 46.5%.
The rally was primarily driven by legalization hopes in more U.S. states. The Biden government has the friendliest political environment for the cannabis industries in U.S. history. This is especially true, as the new government will expedite the legalization of marijuana at the federal level, thereby providing a boost to the U.S. industry.
Additionally, now with the Blue Wave, the markets are anticipating that the Marijuana Opportunity Reinvestment and Expungement (MORE) Act passed by the House in December will soon be approved by the Senate, which otherwise has lesser chance to pass. The bill aims to decriminalize cannabis at the national level for the first time, and remove cannabis from the list of federally controlled substances and erase certain federal convictions (read: ETFs to Watch as Biden Heads to White House).
Let’s take a closer look at the fundamentals of POTX.
POTX in Focus
This ETF seeks to invest in companies across the cannabis industry and tracks the Cannabis Index. The index includes companies involved in the legal production, growth and distribution of cannabis and industrial hemp, as well as those involved in providing financial services to the cannabis industry, pharmaceutical applications of cannabis, cannabidiol (i.e., CBD), or other related uses including but not limited to extracts, derivatives or synthetic versions.
The product holds 18 stocks in its basket with Canadian firms accounting for 75.3% of assets while the United States takes 12.2% share. It has accumulated $88.2 million in its asset base and trades in an average daily volume of 266,000 shares. The fund charges investors 50 bps in fees per year.
Though most of the stocks in the fund’s portfolio delivered strong returns, a few have gained more than 50% in the first month of 2021. Below we have highlighted the five best-performing stocks in the ETF with their respective positions in the fund’s basket:
Best-Performing Stocks of POTX
Tilray Inc. (TLRY - Free Report) : This Canada-based pharmaceutical company develops cannabis-based medicines, drugs, drops and oil products. Tilray occupies the top position in the fund’s basket with 13% allocation. It has gained about 112% in a month. The stock has a Zacks Rank #3 and Growth Score of B (read: 5 Sector ETFs That Outperformed in a Volatile January).
Corbus Pharmaceuticals Holdings Inc. (CRBP - Free Report) : This Massachusetts-based phase 3 clinical-stage pharmaceutical company is focused on the development and commercialization of novel therapeutics to treat rare, chronic, and serious inflammatory and fibrotic diseases. It has gained 75.6% in a month. The stock makes up for 4.5% share in POTX. It has a Zacks Rank #3 (Hold) and a Momentum Score of A.
Aphria Inc. : This Canada-based company produces, supplies and sells medical cannabis primarily in Canada. Aphria occupies the third position in the fund’s basket with 11.1% allocation. It has also delivered incredible returns of about 71% in a month. The stock has a Zacks Rank #3.
HEXO Corp. : This Quebec-based is a consumer-packaged goods cannabis company. The stock takes the seventh spot in the fund’s basket with 6% of the assets. It has gained 56.7% in a month. HEXO has a Zacks Rank #3 and Momentum Score of A (read: 5 Best-Performing Leveraged ETFs of January).
Canopy Growth Corporation (CGC - Free Report) : This Canada-based company offers dry cannabis and oil products primarily under the Tweed brand. The stock has surged more than 53% in a month. It currently carries a Zacks Rank #4 (Sell) and takes the fifth spot, accounting for 8.7% of total assets.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>