Wall Street was downbeat last week as the record-breaking rally in the main indexes paused due to a high inflation reading caused by global supply chain issues. This, in turn, boosted bond yields, hurting stocks. The S&P 500 lost 0.3% in value, the Dow Jones was down 0.6%, the Nasdaq fell 0.7% and the Russell 2000 slipped 1.0%.
Marijuana/cannabis however, remained on a high. Several cannabis ETFs including
Global X Cannabis ETF ( POTX Quick Quote POTX - Free Report) , Advisorshares Pure US Cannabis ETF ( MSOS Quick Quote MSOS - Free Report) , Advisorshares Pure Cannabis ETF ( YOLO Quick Quote YOLO - Free Report) and Amplify Seymour Cannabis ETF ( CNBS Quick Quote CNBS - Free Report) were at the top of the weekly ETF performance charts last week. Hopes of legalization and Sundial Growers ( SNDL Quick Quote SNDL - Free Report) ’s stock buyback news boosted the space.Sundial Growers gained 27.8% on Nov 12, giving the related ETFs a massive boost. Inside the Rise in Cannabis Shares
Cannabis stocks rose last week on reports that
Republican Representative Nancy Mace from South Carolina has raised the possibility of a bill that seeks to legalize weed. The removal of cannabis from Schedule I of the Controlled Substances Act would make it legal in the United States.
“Despite all of the strong growth and bottom-up dynamics, [cannabis] really still is very much a macro story for investors,” Tim Seymour, the portfolio manager of CNBS, said,
as quoted on CNBC. ″[It’s] huge news for a market that was not expecting de-scheduling or a federal outcome potentially before midterm elections and something that clearly is in the price of cannabis stocks,” he added. Overall, President Biden’s era in the United States will likely speed up the legalization of marijuana at the federal level, thereby providing a boost to the U.S. cannabis industry. All these developments helped the sector to gain last week.
Sales have also been strong for marijuana amid the latest virus outbreak. There is a report that some strains of medical marijuana are proving effective to treat coronavirus. The report indicates that medicinal marijuana could block up to 70% of the proteins used by the virus to infect cells (read:
Cannabis on a Roll: Guide to ETF Investing).
Against this backdrop, below we highlight a few marijuana/cannabis ETFs that stole the show last week.
Global X Cannabis ETF ( POTX Quick Quote POTX - Free Report) – Up 17.4%
The Global X Cannabis ETF (
POTX Quick Quote POTX - Free Report) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Cannabis Index. The underlying index provides exposure to exchange-listed companies that are active in the cannabis industry.
Aurora Cannabis (10.89%), Sundial growers (8.81%) and Organigram Holdings (8.63%) are the top three holdings of Global X Cannabis ETF. POTX yields 2.47% annually and charges 51 bps in fees.
Advisorshares Pure US Cannabis ETF ( MSOS Quick Quote MSOS - Free Report) – Up 13.9%
The AdvisorShares Pure US Cannabis ETF seeks to achieve its investment objective by investing, under normal circumstances, at least 80% of its net assets in securities of companies that derive at least 50% of their net revenue from the marijuana and hemp business in the United States and in derivatives that have economic characteristics similar to such securities.
Green Thumb Industries Swap Rec (11.66%), Trulieve Cannabis Swap Rec (11.51%) and Curaleaf Holdings Inc Swap Rec (8.51%) hold the top three spots in the AdvisorShares Pure US Cannabis ETF (
MSOS Quick Quote MSOS - Free Report) . MSOS charges 74 bps in fees. Advisorshares Pure Cannabis ETF ( YOLO Quick Quote YOLO - Free Report) – Up 12.8%
The AdvisorShares Pure Cannabis ETF (
YOLO Quick Quote YOLO - Free Report) seeks long-term capital appreciation by investing in both domestic and foreign cannabis equity securities. Innovative Industrial (17.50%), Village Farms International (15.11%) and Trulieve Cannabis (11.81%) are the top three companies of YOLO. The ETF YOLO charges 75 bps in fees. Amplify Seymour Cannabis ETF ( CNBS Quick Quote CNBS - Free Report) – Up 10.9%
The Amplify Seymour Cannabis ETF seeks to provide investors capital appreciation. It is an actively-managed fund. Amplify Seymour Cannabis ETF (
CNBS Quick Quote CNBS - Free Report) holds 34 stocks and charges 75 bps in fees.
The ETF CNBS hold Green Thumb Industries (8.29%), Tilray (8.10%) and Curaleaf Holdings (6.89%) at the top three positions.