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[Editor’s note: “4 Best Marijuana ETFs for Conservative Portfolios” was previously published in May 2019. It has since been updated to include the most relevant information available.]
Investors are clamoring for ways to get in on a popular, but risky, marijuana-investing craze. Despite the reality that cannabis is illegal under federal law, many states have legalized the substance and plenty of marijuana ETFs have cropped up as a result.
For recreational use, Oregon, Massachusetts, California and a few more states allow marijuana use. Yet, the majority of U.S. states have medical marijuana legislation in the pipeline. Presently, with the legal disconnect between federal and state law regarding marijuana use, investing directly in U.S. marijuana ETFs and stocks is risky and replete with scams and fraud.
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If you’re determined to get in on the marijuana investing scene, there are several “conservative-ish” marijuana ETFs for partaking in the speculative pot party:
Alternative Harvest ETF (MJ)
Hot off the New York Stock Exchange, the Alternative Harvest ETF (NYSEARCA:MJ) began trading on Dec. 26, 2017.
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Derived from an international real estate investment trust (REIT) fund, the marijuana ETF tracks cannabis cultivators, producers and distributors, along with cannabinoid drug makers, fertilizer producers and tobacco companies.
As the first of what is sure to be many U.S. marijuana ETFs, the Alternative Harvest enjoys a first-mover advantage.
American Growth Fund (AMREX)
It’s risky to call American Growth Funds Series Two Class E (MUTF:AMREX) a conservative marijuana pick., as the fund has racked up significant losses in the past
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Yet, if you’re a contrarian seeking a fund with access to the cannabis industry through marijuana ETFs you might consider AMREX.
AMREX’s top holdings include some well-known names and other niche pot players including GW Pharmaceuticals PLC-ADR (NASDAQ:GWPH), Scotts Miracle-Gro Co (NYSE:SMG), Abbott Laboratories (NYSE:ABT), Cara Therapeutics Inc (NASDAQ:CARA), Cannabis Sativa Inc (OTCMKTS:CBDS) and more.
The fund is small and hasn’t gained serious investor traction, but it might be a good diversifier against the movements of the S&P 500.
Cronos Group Inc. (CRON)
Go north for another fund tapping into marijuana ETFs. Cronos Group (NASDAQ:CRON), formerly known as PharmaCan Capital Corp, and formerly trading on the OTC market under “PRMCF,” is an investment firm focused on investing in the medical marijuana industry.