According to a report from the BDSA, the cannabis sector had a breakout year in 2020, with global marijuana sales hitting approximately $21.3 billion, up 45% from $14.4 billion in 2019. In the US market, cannabis sales climbed 46% year over year to $17.5 billion in 2020. The sector shows no sign of stopping its growth as global cannabis sales are projected to grow at a compound annual rate of 17 percent to $55.9 billion by 2026, according to BDSA.
Should You Invest in CBD Stocks?
Number of Hedge Fund Holders: 7
9. Zynerba Pharmaceuticals, Inc. ( NASDAQ: ZYNE )
By the end of the first quarter of 2021, 6 hedge funds out of the 866 tracked by Insider Monkey held stakes in Zynerba Pharmaceuticals, Inc. (NASDAQ: ZYNE) worth roughly $3.47 million.
To help you choose the best cannabis investments, we take a closer look at stocks and funds, as well as a few less dank offerings it’s perhaps better to avoid. There are both pure plays—firms that specialize exclusively in bud—and large-cap names that also have some pot industry exposure.
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• AdvisorShares Pure US Cannabis ETF (YOLO). Actively managed ETFs are hard to come by, but here’s one for the cannabis sector. If you’re looking to dip a toe into cannabis, this ETF can help you get all the benefits of an actively managed mutual fund with the real-time liquidity of an ETF. A relatively new fund, it invests in mid-cap industry firms in the U.S., Canada, the U.K. and even Israel. As an active ETF, the expense ratio is high, clocking in at 0.75%.
The Best Pure Play Cannabis ETFs
• GrowGeneration Corp (GRWG). Back in the day, hearing “hydroponics” made you instantly think of someone growing weed in their basement. Today, hydroponics is one of the top cultivation methods for the legal cannabis industry, and GrowGeneration stands as the leading supplier of hydroponic equipment in the U.S. Offering over 50 retail centers throughout the U.S., this young company (founded in 2014) is growing by leaps and bounds. No dividends as of yet, but a P/E ratio above 104 says that growth-oriented investors might find what they’re looking for.