Top Ways to Trade a Potential Cannabis Boom

Sep 28, 2023

The Senate Banking Committee voted, 14-9, to approve the Secure and Fair Enforcement Regulation (SAFER) Banking Act, sending it to the floor.

According to Senate Majority Leader Chuck Schumer, D-N.Y., “Today’s markup of SAFER Banking represents a huge step forward in the Senate’s effort to help cannabis businesses operate more efficiently, more safely, more transparently. … It’s been a goal of mine since we started this session of the Senate to move forward on this legislation.”

Now, we wait for the House to decide where things go from here.

While many folks doubt passage in the House, if it does make its way through, cannabis stocks and ETFs could see higher highs, including:

ETFMG Alternative Harvest ETF (MJ)

With an expense ratio of 0.75%, the MJ ETF tracks the Prime Alternative Harvest Index, designed to measure the performance of companies within the cannabis ecosystem benefitting from global medicinal and recreational cannabis legalization initiatives. Some of its top holdings include Canopy Growth, Cronos Group, Aurora Cannabis, and OrganiGram Holdings.

Global X Cannabis ETF (POTX)

With an expense ratio of 0.50%, the ETF seeks to invest in companies across the cannabis industry. This includes companies involved in the legal production, growth and distribution of cannabis and industrial hemp, as well as those involved in providing financial services to the cannabis industry, pharmaceutical applications of cannabis, cannabidiol (i.e., CBD), or other related uses. Some of its top holdings include Canopy Growth, HEXO Corp., and AFC Gamma.

Advisor Shares Pure US Cannabis (MSOS)

With an expense ratio of 0.73%, the ETF is the first actively managed U.S.-listed ETF with dedicated cannabis exposure focusing exclusively on U.S. companies, including multi-state operators. The portfolio manager allocates across an investable universe of U.S. companies spanning a variety of cannabis-related businesses. Some of its top holdings include Green Thumb Industries, Curaleaf Holdings, Cresco Labs, Jushi Holdings, and GrowGeneration Corp.

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