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.
By the way, the fund is currently tiny, $26 million. I'd watch to see whether this attracts new capital. If it does, money pouring into relatively small stocks like these could drive up their prices tremendously.
'Bout time! didn't i mention someone should start one? in a previous post? or was I hallucinating - again?
sooo...... it looks like others have put in about $25 million...in addition to my initial investment, eh?
Don't worry about supply. Marijuana companies are raising capital about as fast as can which will keep everyone afloat in paper. The easy bubble money has been made when they all went up 300-400%. None of them have the capital to grow revenue to meet their valuations without raising more capital. These are agricultural stocks, not technology stocks. You don't get unlimited free copies of the software. More issues coming soon to a discount brokerage near you.
I'll agree Doctrine , it might not going to be "the sky is the limit" business - but I want to believe they are accumulating
knowledge , and hopefully very valuable one , through the medical part of it - knowledge that regular seed & plant labs
in the us and most of the rest of the world (except maybe Holland & Israel ) can not have any access to. Thats why I'm
a buyer - but no, etf is not for me.
The fund is up to $38 million now, so it went from $10 million to $38 million of assets in just a couple days of trading.
Like I said... if tons of money start flowing into this sector, it could be a real crazy bubble. I'm thinking of playing this as a lottery ticket, just in case a billion $ of greed flows in from around the world and creates an enormous bubble.
I have been looking into this since I saw this thread.
Overall I don't think playing the marijuana sector by individual stocks is for me. But in an ETF that could work, I have looks at the ETF's holdings and some of the larger US companies may provided reasonable downside protection, while the smaller ones may provide more upside potential.
I will be watching this one closely over the next few weeks.
I also like the idea of doing this with an ETF. I would not buy the individual stocks.
This is somewhat like a pharma stock ETF and it's probably going to be damned volatile. If the bubble circumstances are right, it could run up 3x or 6x in value and share price. But join the party late and it could probably tank 90%.
I think the potential upside is greater than the downside. I could see $100 in HMMJ turning into $10 (if bubble bursts) or into $600 (bubble continues).
The main thing I'm going to watch is the rate of inflows (new capital) into the ETF.
The current $38 million AUM is very impressive for a brand new Canadian ETF. Consider that iShares has 14 funds with less AUM and some of them have been around for nine years!
I hold stocks from MJ Canadian companies since they were under $1 and that are listed in the ETF. It has been extremely volatile, but since it didn't go down so much. Right now some are shorting and spamming, pumping and dumping in some forums, but it is sure that the future is not clear since PM stated that the legalization will be done on 2018. However if you check all holdings in the ETF you can see consolidated MJ companies from US like Insys that it went down from $44 to $9-10. In some moment this can go high again.
Btw, the starting price of $10 and $11.45 as of today, it was so high and risky to buy more than a board lot since I already have more shares individually, I started to buy just 200 shares of the ETF last week. Maybe this can go high in the midterm.
Given the volume on this today, I suspect that Net Assets have swelled to over $50 million at this point. We'll see once the web site is updated. This ETF is looking like a huge win for Horizon.
It's now at $62 million assets. This four day old ETF is now larger than 26 iShares ETFs, including: XID (India Index), XIT (the 16 year old tech index), XCH (China index)
Isn't that crazy? XIT, the tech sector ETF that was created in 2001, is smaller than the four day old HMMJ
Insider selling is spiking. Not a great sign, but don't let that stop anyone from investing, I'm sure it's just for personal reasons.
A lot of friends and acquaintances are asking me about marijuana stocks. Some of them don't even have an RRSP but want to buy in, and probably will. Sigh.
Don't worry, today's growth in HMMJ was honourably taken by Aphria as soaked that up with the $17.5M of convertible bonds that just went into common shares for people to buy. They also issued $40M in more in convertible bonds, which have a conversion price of $3.29 which the stock was unbelievably trading above for almost 15 minutes this morning, before it tanked by over a whopping 23% in minutes. All this from a company which has issued $132M of equity in the last 9 months, and had $1M of EBITDA in the last quarter and a market capitalization in excess of $1B and trades on the most reputable stock market in the country. Aphria's last offering was at $5.00, so I wonder how they feel about the convertible bond being callable at $4.94. To be fair, I'm not certain whether other companies raised capital today, but it seems to happen pretty often. Any warning signs here? I feel like a broken record, so I may stop complaining soon and retreat to my boring pipelines, utilities, telecoms and banks.
Please don't misunderstand my excitement. These are crazy, unjustifiable valuations and insanity across the board. But if you spark that bubble psychology, the thing can really run away... I'm just saying there may be money to be made speculating on the bubble. I wouldn't invest more than 0.5% my portfolio in the sector.
I get that, but hope of insanity is not a great investment strategy. You don't want to be the one left holding the bag. If anyone does get in, I would recommend setting a price at which you would get out.
I heard somewhere there are something like 200 applications to enter the space. And Health Canada is going to accelerate the process. Barriers to entry are being removed. It is fascinating, of course, can't wait to see how it all turns out.
I would approach this acknowledging the possibility of a 90% loss.
The approach I am using is watching the fund NAV and looking at the fund flows. If it establishes a pattern that makes me think that money is steadily flowing in, then I will join with the idea of riding the bubble psychology. If on the other hand there is the initial interest but than NAV stops growing (showing that interest has exhausted) I may not touch it.
Interesting daily opening spikes on this etf.
Is this the effect of inexperienced (stoned?) retail investors placing market orders rather than buy limit orders?
Fer sure!
I just hope that when the smoke is legalised, the same goes for oil.
Lots of oil is available in U.S. but they won't ship to Canada;
which is probably a good thing, as a horseman is likely to show up at the door if any oil is delivered.
Canopy just launched a website called "Tweed Main Street" where you can buy medical marijuana online (with a prescription). Presumably once it goes legal for recreation this same website will sell the recreational stuff too. Anyways, the only products I could see on there were oils, so I believe they are already available here, for medical use. This seems to imply they would also be available for recreational. If I were the government I would want to encourage that, as smoking can be hazardous to one's health.
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