Is Cannabis The New Bitcoin?

mag813 January 10, 2018 0
Is Cannabis The New Bitcoin?

Talk about a fresh start for the new year. A cannabis-focused exchange traded fund is soaring as more states legalize marijuana sales.

But it’s not a newly minted ETF. ETFMG Alternative Harvest ( MJX ) has run up 16.4% so far this year through Jan. 9, according to Morningstar Direct, far ahead of the S&P 500’s 2.8% gain. The fund hit a new intraday high Tuesday. It perked up with a 3% jump Dec. 26, when MJX began trading with a new objective and ticker, and has soared 30% since then.

MJX now boasts $317.6 million in assets and owns Canadian pot stocks such as Cronos Group, Canopy Growth and Aurora Cannabis. It also has positions in medical companies such as GW Pharmaceuticals ( GWPH ), a U.K.-based developer of marijuana-derived drugs to treat cancer and other diseases, and Insys Therapeutics ( INSY ), whose products target cancer pain.

A handful of tobacco makers including British American Tobacco, Japan Tobacco and Altria Group ( MO ) round out the 30 holdings in the portfolio.

Since the fund began trading under the new objective and ticker two weeks ago, there isn’t really a track record. It’s currently extended from any buy point . MJX carries a 0.75% expense ratio.

AdvisorShares Vice ETF ( ACT ) isn’t a pure-play marijuana fund. As the name implies, it’s a broader theme. As of Dec. 13, cannabis stocks accounted for 20% of its portfolio, while alcohol and tobacco made up the remaining 49% and 32%, respectively.

ACT has attracted $15.1 million since its Dec. 12 launch. Its top holdings include alcoholic beverage producer Constellation Brands (STZ), drugmaker AbbVie (ABBV) and agricultural chemical firm Scotts Miracle-Gro (SMG).

Constellation Brands rose more than 2% Tuesday on news related to its work with Canopy Growth Corp., a Canadian medical marijuana company, to develop nonalcoholic cannabis drinks . The beer and wine giant in October announced it would take a 9.9% stake in Canopy.

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