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Marijuana ETF - HMMJ

79K views 290 replies 57 participants last post by  doctrine 
#1 ·
This Horizons ETF (HMMJ) launched yesterday and is the first marijuana ETF in the world! It holds mostly Canadian marijuana related stocks, capped at 10% each. Thoughts?

The fact it's a new sector is intriguing, I'll admit, though all the stocks in it are very high risk. I'm tempted to buy 100 shares as a lottery ticket, purely as a ponzi/bubble play in case tons of money pours into the sector and sparks a bubble.
 
#63 ·
It's hitting the right demographic that have money and smoke weed. 40-80 and they know nothing about investing they just smoke weed.

The start up euphoria was at $8 for canopy about double it's value. Now it's hysteria at $20 with sales of 17.5 mil.

You can also make the same case for tesala. Just gobs of over head and no profit in site.
 
#68 ·
There's a new ETF in the US that has been driving interest; MJX on the NYSE. It has most of the big names in Canada, and traded 1.8 million shares today. HMMJ traded another 2 million shares. That's pretty intense volumes, and the US involvement I believe is driving the new volatility. I'm glad I made some money trading WEED in the last month so I can say I participated but it's so volatile that I don't think I can stay in this industry long term.
 
#70 ·
I would also add, that the amount of stock paper being issued has not dramatically increased. When $1B wants to enter the space, they have to pry it from existing shareholders. And I believe more than that has come in just in the last week or two. This is straightforward supply and demand...people want more marijuana stock.
 
#72 · (Edited)
People are scrambling on the Reddit thread. It's time for annual TFSA contributions and you can just 'see' the gleam in their young eyes, magically turning that $5500 into 20k by next weekend. The 90% YTD yield on the ETF is nothing when you look at the 1000% gains on some individual stocks in December alone.
 
#88 ·
Net Assets, per the HMMJ profile on the Horizons ETF website: $712,971,339 (AS AT 2018-01-05)

Wow. $200 million increase in net assets in a couple of days!

Also - Globe and Mail today on retail brokerage outages ...
"But officials in the brokerage industry say the outages mostly boil down to a simple – but crucial – problem: server space. Retail demand is so unexpectedly high, particularly for stocks in the marijuana industry, that it has become overwhelming."
 
#76 ·
It's really hard to say it's in a bubble. There are real profits and substantial growth with a likely 5+ year runway to go as it takes years to improve quantity and quality and pry people away from their black market dealers, if the US states like Colorado are any example. An optimistic scenario would suggest more than $10B/year of sales within a few years, meaning potentially billions of operating earnings. There will have to be to justify the $20-25 billion of market cap of the Canadian companies. I think, although I'm not sure, that this is closer to the top end of optimistic scenarios that could any way justify the stock price. Going to the $40-50B of value will have to start to assume that the Canadian companies *are* the future giants, the Phillip Morris's, the Anheiser-Busch's of the world are here and now. That's more of a stretch for me, I think.

The real magic is that investors can price this whatever way they want. If they decide pot companies are worth 25 times earnings, then actually maybe the Canadian market alone could support $50B in companies, which means a double or more from here, or a lot of new capital. I think they keep going up unless significant new capital enters the market.
 
#77 ·
This would be just amazing if Canadian companies can become the first giants in this global space. Maybe as doctrine says, we might be seeing the birth of the next Philip Morris's.

Hopefully American conservatism will continue holding back the development of their industry, while we race ahead and kick the pants off the American competitors.
 
#79 ·
^ +1 ... I heard that you can get that stuff at the liquor store (Ontario's LCBO) once it gets legalized. And pharmacies are going to get into the act of dispensing it.

I wonder if our auto insurance is ready for the scenario where someone goes HUI (high under influence) on that stuff and crashes ...
 
#80 ·
I've heard in the news dozens of times they are working at making a breathalyzer for THC. I'm sure with the technology these days they will figure something out. Just like alcohol, the breathalyzer just gives you a rough number, but they need to bring you back to the station measure your actual BAL. So I assume they will eventually get some accurate numbers from blood or saliva, and make a standard. Or maybe touch nose with each finger :p Alphabet backwards from Z-A


I just want to put this out there, smoking anything will increase your chance of lung cancer.
 
#82 ·
4.5 million shares in HMMJ traded today. That's nearly 50% higher than the previous highest volume by my count. The demand is incredible. A year ago, these companies were issuing shares hand over fist. Now, that's all dried up. No major IPOs and only a few secondary offerings from the main players which have long since been consumed. MJX, the US cannabis ETF, up to $200M in assets this week. HMMJ about $600M.
 
#87 ·
4.5 million shares in HMMJ traded today. That's nearly 50% higher than the previous highest volume by my count.
It's actually more volume than this. TSX only has 50% of the market share for Canadian stocks. The other major exchanges (alpha, omega, NASDAQ's CXC and CX2, etc) carry another 50% of Canadian stock volume.

Unfortunately most of the brokerages I've seen still quote the TSX volume, but that's a mistake. We all should get out of the habit of referring to TSX as the marketplace, because it's only part of the Canadian market.

According to consolidated volume data for all Cdn exchanges today, XIU traded 6.6 million shares today. XIU is generally acknowledged to be the most liquid and active ETF in the country and has been listed for about 20 years.

HMMJ traded 9.3 million shares today. Over nine million shares! Unbelievable. HMMJ had 41% more volume than XIU today.
 
#83 ·
Been seriously considering adding HMMJ to my portfolio in place of some bonds as I could stand to be a bit more aggressive. Obviously I wish I'd jumped in a bit early with this recent jump lol but it looks like it could just be the beginning. Hopefully HMMJ adds more diversification to its holdings in the future though.
 
#84 ·
So you're considering a modification to your asset allocation by reducing safety of principle, low risk fixed income in exchange for extremely high risk, highly speculative marijuana stocks. I remember earlier in the year when Canopy Growth Corp. lost nearly half of its value from peak to trough.

Seems like quite the modification.

ltr
 
#85 ·
Well the key part of my post was that I’m currently holding more bonds than I prefer. I was originally going to reallocate to my normal ETFs but am considering diverting some of it to HMMJ.

We are talking less than 5% of my portfolio. Also watching cryp currencies carefully. Essentially considering including a very small higher risk/volatile segment in my portfolio for further diversification and potential returns if they play out as major successes. Again I’m talking a tiny percentage of my portfolio (less than 1% to start).

Haven’t decided on anything yet.
 
#89 ·
In Canada, our government recently passed two laws.
They are:1. Legalized gay marriage
2. Legalized marijuana.
Legalizing gay marriage and marijuana at the same time now makes perfect Biblical sense.
Leviticus 20:13 says:
"If a man lies with another man they should be stoned.
"Apparently we just hadn't interpreted it correctly before!
 
#92 ·
HVST and MPX have been gold mines for me. I unfortunately didnt pick more MPX up during its dip and it shot up huge on friday end of day.

HVST is solid as no debt, and good growth prospects. sold out of HVST for about 1000 gain. if there is any dip i will gladly buy back in and potentially double down.
 
#94 ·
I believe total net assets is slightly overstating the growth. Net units outstanding is also important, because a big portion of the NAV growth is from share price appreciation. Although new money is entering, they are now only able to buy less units per $. In any case, I used your net asset numbers and divided by the closing share price on each of those days to get the # of units of HMMJ outstanding:

Jun 8 - 11.8 million
Nov 7 - 17.3 million
Nov 28 - 20.8 million
Dec 29 - 26.3 million
Jan 5 - 32.2 million
 
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