Thoughts on MJ?

[BMK]

Anyone looked at this ETF?

It uses and index called Alternative Harvest. As the stock symbol suggests, it is supposed to be about investing in cannabis businesses. And there are in fact a number of cannabis companies in the index. Most or all are Canadian. But not all the companies in the index are in the cannabis business.

There are no US-based cannabis companies in the index, because marijuana is still illegal under US federal law. It is legal in many states in the US, and federal agencies have been directed by the US Attorney General not to prosecute businesses that are operating legally under the applicable state laws. But it doesn't change the fact that growing and selling marijuana is still illegal under US federal law. So a US-based business can't be publicly traded, and they are not included in the index. Right now, US-based cannabis businesses can't get really big, because they cannot operate across state lines.

The index appears to contain a lot of tobacco companies, on the theory that these companies are likely to get into the cannabis business when/if it finally becomes legal under US federal law...

And of course no one knows when that will happen.

BMK

 

[lightninboy]

I'm not too proud to trade cannabis or tobacco when I see a good deal in them, but I haven't seen a good deal in them for a long time.

 

[Sigue!]

In a cursory scan on etf.com the only thing I saw that would keep me away is the 0.2% average spread. Trading volume is on the light side.

 

[JSOP]

Anyone looked at this ETF?

It uses and index called Alternative Harvest. As the stock symbol suggests, it is supposed to be about investing in cannabis businesses. And there are in fact a number of cannabis companies in the index. Most or all are Canadian. But not all the companies in the index are in the cannabis business.

There are no US-based cannabis companies in the index, because marijuana is still illegal under US federal law. It is legal in many states in the US, and federal agencies have been directed by the US Attorney General not to prosecute businesses that are operating legally under the applicable state laws. But it doesn't change the fact that growing and selling marijuana is still illegal under US federal law. So a US-based business can't be publicly traded, and they are not included in the index. Right now, US-based cannabis businesses can't get really big, because they cannot operate across state lines.

The index appears to contain a lot of tobacco companies, on the theory that these companies are likely to get into the cannabis business when/if it finally becomes legal under US federal law...

And of course no one knows when that will happen.

BMK

I have no problem in trading cannabis stocks but tobacco companies? I dunno. I mean they diversify into other businesses but still the product that they are selling is borderline unethical at best.

 

[Bad_Badness]

Boy that index seems more like a "where it is going" play.

There are some stocks that are basically US companies that trade on the SUB-Toronto Venture exchange, known as PURE. What they do is buy, e.g. a defunct mining company, on a Canadian exchange. Then repurpose it on PURE. Then they try to get access to more capital, by moving up the ladder to get eventually up to VENTURE on TSX. But in the meantime they trade a mirror on the PINK Sheets in the US.

Now to be clear, PURE is the real wild west. You and I can have an idea, no financials, no track record, no product, just a presentation, and go through the process and list on PURE. You should read about PURE and the levels on PURE.

As for how to play the Cannabis market? I would do one of two things. Trade the technical and news like a biotech startup. Or do the fundamentals and hold long term. The key to US markets will be a GMP certificate from the FDA or some sort of USDA approval. These will be an edge for those companies, but that takes skill and money. Alternatively, Columbia might be a player. They have a huge track record in mass horticulture of cut flowers.

Funny story, I had a weed farm for 3 years. Sold it after making about $60 dollars. I sold 2 mil grams! Also know that wholesale prices are about 1/3, just like normal, of retail. Weeds yields are like produce. There is a lot of non AA material. Personally, I do not think there is much of a play left.

But back trading. I was offered a position in Forefront at 1.00 CND. As much as I wanted. I did 0. You can check out how that would have worked out. I did trade it for a short bit, but abandoned it after breaking even because I could not muster enough interest to take a significant position.

No comment on the ethics.

Cheers.