Business

A Guide to Cannabis Investing

From pot stocks to ETFs, these are the marijuana companies to know.

Photo Illustration by 731
Photo Illustration by 731

In the past year, cannabis stocks outperformed gold, Bitcoin, and the broader market. As investors buy into the frenzy, the biggest pot companies are seeing their valuations soar. And the largest among them, as tracked by Bloomberg Intelligence’s Global Cannabis Competitive Peers Index, have price-to-sales ratios in the triple digits. Canopy Growth, which is valued at $11.4 billion, currently trades at a price-to-sales ratio of 132, and Aurora Cannabis, valued at $9.2 billion, trades at 106. GW Pharmaceuticals is at 231. For comparison, Apple and Amazon.com have p-s ratios of about 4.

Market Performance

Change since Sept. 29, 2017

Data: Compiled by Bloomberg

 

The top three cannabis companies account for almost 30 percent of the market cap of the top 100 companies in the BI cannabis index.

Map of the Marijuana Market

Companies tracked by the Bloomberg Intelligence Global Cannabis Competitive Peers Index

Data: Compiled by Bloomberg

As investor interest in cannabis has grown, the exchange-traded fund industry has responded with new products, including at least three so far this year.
 

Marijuana-focused ETFs

 
ETFMG Alternative Harvest (MJ)
Inception: 12/3/15
Return since inception*: 83.1%
Management fee: 0.75%
Tracks the performance of the Prime Alternative Harvest Index; includes U.S. exposure

Horizons Marijuana Life Sciences Index (HMMJ)
Inception: 4/5/17
Return since inception: 157%
Management fee: 0.75%
Tracks the North American Medical Marijuana Index; larger market caps

Purpose Marijuana Opportunities Fund (MJJ)
Inception: 2/1/18
Return since inception: 58.4%
Management fee: 0.75%
Actively managed fund investing primarily in Canadian companies

Evolve Marijuana (SEED)
Inception: 2/12/18
Return since inception: 21.8%
Management fee: 0.75%
Actively managed fund investing in both medical and recreational marijuana

Horizons Emerging Marijuana Growers Index (HMJR)
Inception: 2/14/18
Return since inception: -9.6%
Management fee: 0.85%
Focused on micro and small caps

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