The market for recreational marijuana sales has commenced on 1st January 2018 in the state of California in the United States.
This, is big business!
According to cannibis financial analysis firm GreenWave Advisors, the state’s existing black market for marijuana is pegged at $13.5bn, while the legal market could be worth an estimated $5.1bn in 2018. Another source, Marijuana Business Daily, estimates that sales could reach $8bn in 2019.
The market for recreational marijuana sales has commenced on 1 January 2018 in the state of California in the United States. This, is big business. According to cannibis financial analysis firm GreenWave Advisors, the state’s existing black market for marijuana is pegged at $13.5bn while the legal market could be worth an estimated $5.1bn in 2018. Another source, Marijuana Business Daily, estimates that sales could reach $8bn in 2019.
While five other states in the US already offer legal marijuana sales, the size of the state of California is set to reshape the entire industry.
Since 1969, support for the legalized use of marijuana has increased by five-fold:
Legal Status of Cannibis:
Getting Exposure To The Marijuana Industry via ETFs:
#1. Horizon Marijuana Life Sciences Index ETF
The ETF seeks to replicate, to the extent possible, the performance of the North American Marijuana Index (the “Index”), net of expenses. The Index is designed to provide exposure to the performance of a basket of North American publicly listed life sciences companies with significant business activities in the marijuana industry.
Top 20 Holdings and Composition by Country:
Technical View: At current levels the price is slightly higher where I would suggest an entry. Should we see a short term pullback, investors should look to add to a portfolio.
#2. AdvisorShares Vice ETF
The investment thesis of the AdvisorShares Vice ETF (Ticker: ACT) believes that investing in select alcohol and tobacco companies will provide continued growth and long-term performance across all types of market environments.
Coupled with the continuing societal acceptance and regulatory approvals of cannabis across jurisdictions, a new investment avenue has emerged that provides a compelling upside to complement the steady and more predictable returns of the coined recession-proof equities.
Technical View: Investors could look to add at current levels ($26.66), using a stop loss of $22.
#3. ETFMG Alternative Harvest ETF
MJX tracks the Prime Alternative Harvest Index, an index created to provide investors with a product that enables them to take advantage of both event-driven news and long term trends in the cannibis industry as well as the industries likely to be influenced by the medicinal and legalization initiatives taking place in many locations globally. The index is designed to measure the performance of companies that will benefit from these initiatives, collectively referred to as companies in the cannibis ecosystem.
Technical View: After consolidating in a sideways range since mid-2016, the price has made a bullish upside break. Buy at current levels or better ($35.57). Stop-loss: $30.