In the first week of May, top marijuana stocks have continued to see downward pressure in the market. Currently, many leading cannabis stocks are trading near their lowest price points in 2021. As a result, this could be an opportunity for investors to find pot stocks for their portfolio at lower entry levels. But gaining exposure to leading pot stocks can have its downfalls.
For one marijuana stocks are known for being some of the more volatile stocks in the market. This can make it more difficult for long-term investing in the sector. Although this may be true, there are ways to gain exposure to the cannabis industry that could provide more market stability. Cannabis ETFs are a way more investors are gaining exposure to the cannabis market.Understanding Marijuana ETFs
For those that don’t know ETFs or exchange-traded funds track an index, a commodity, bonds, or a basket of securities. In particular, ETFs are in many ways like mutual funds but they trade on an exchange like a stock. At the present time, there are a few marijuana ETFs that are available for investors. In many cases, these cannabis ETFs focus on a specific area of the cannabis market.
In essence, this could give investors a way of gaining exposure to the US cannabis market versus the Canadian sector. Because most leading marijuana stocks are currently trading at lower levels cannabis ETFs could be at a good level for starting a position. With the intention of finding top marijuana ETFs to invest in for May, we can research some options. For investors looking for simplified ways to invest in the cannabis industry, these could be the best marijuana ETFs in 2021.
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- AdvisorShares Pure US Cannabis ETF (NYSE: MSOS)
- Amplify Seymour Cannabis ETF (NYSE: CNBS)
- ETFMG Alternative Harvest ETF (NYSE: MJ)
AdvisorShares Pure US Cannabis ETF is the first US cannabis ETF to surpass $1 billion assets under management. Primarily the ETF focuses solely on American cannabis companies for their holdings. Currently, the ETF has assets that include US MSOs, top U.S. cannabis REITs, CBD companies, pharmaceutical companies, and hydroponic suppliers. To name a few, the cannabis ETF’s majority holdings are Trulieve Cannabis Corp. (TCNNF), Curaleaf Holdings, Inc. (CURLF), Green Thumb Industries Inc. (GTBIF), and Cresco Labs Inc. (CRLBF). While the cannabis sector visits some of its lowest market value in 2021 it could be time to add MSOS cannabis ETF to your May watchlist.AdvisorShares Logo
MSOS ETF is up 17.15% year to date with a high of $55.91 in February. Currently trading at $41.51 on May 6th this ETF is up 48.01% in the last 6 months. According to analysts at Wallet Investor MSOS ETF has a 1-year forecast price target of $84.046 per share. In essence, this would represent a 102.47% increase from current levels. With this in mind, MSOS ETF could be one of the top cannabis ETFs to invest in for 2021.Amplify Seymour Cannabis ETF (CNBS)
Amplify Seymour Cannabis ETF is a fund that provides investors exposure to the global cannabis industry. Currently, the ETF has more than 80% of its holdings in companies generating revenue from cannabis and hemp production. In April the company announced it now has the ability to access MSOs via swaps. In fact, with the completion of both legal and operational work in order, CNBS ETF is ready to add portfolio exposure to this area of cannabis companies. At the present time, the majority of the fund’s holdings are companies in the cultivation, retail, agriculture, and pharmaceutical aspects of the cannabis market.
CNBS ETF is up 49.80% year to date with a high of $40.65 in February. Trading at $25.27 on May 6th this ETF is down 11.36% in the last 30 days. According to analysts at Stock Invest CNBS ETF is expected to fall 20.57% during the next 3 months. With CNBS ETF gaining exposure to US MSOs this could be one of the best cannabis ETFs to Watch in May.ETFMG Alternative Harvest ETF (MJ)
ETFMG Alternative Harvest ETF is the largest ETF to target the cannabis market with net assets of $1.71 billion. Currently, MJ ETFs assets are in holdings from top Canadian cannabis companies like Aphria Inc. (NASDAQ: APHA), Tilray, Inc. (NASDAQ: TLRY), and medicinal cannabis companies like GW Pharmaceuticals plc (GWPH), and Turning Point Brands, Inc. (TPB). For the long-term investors, MJ ETF has a dividend with an estimated 2.76% dividend yield. Legalization in the US can be a catalyst this year for the cannabis industry and could send CNBS ETF higher in the market.
Currently, CNBS ETF closed on May 6th at $20.45 down 8.95% in the last month. In February this ETF saw a high of $34.58 and is up 45.37% year to date. According to analysts at Wallet Investor, MJ ETF has a 1-year price forecast of $26.063 per share. In addition, Wallet Investor also has a 5-year forecast of $44.839 per share. For this reason, CNBS ETF could be a good option for long-term investing in the cannabis sector.