Cannabis exchange-traded funds (ETFs) offer a great way to get exposure to the pot market without running the risk of picking the wrong stocks. Marijuana stocks are down across the board today, but they were up significantly on Monday and Tuesday.
The market volatility means investors must be prepared for some ups and downs, but most of the big names in the cannabis sector returned more than 100% in the first couple of months. It's a similar story with cannabis ETFs, which provide exposure to multiple names without having to research them individually to pick one or two.
Here are the top four cannabis exchange-traded funds for this year.
AdvisorShares Pure U.S. Cannabis ETF and AdvisorShares Pure Cannabis ETF
First on the list is a two-for-one. AdvisorShares offers an ETF limited to only North American cannabis companies and another open to global stocks in the sector. The U.S. fund was the first-ever U.S. cannabis exchange-traded fund.
The ETF's top 10 holdings are Green Thumb Industries, Trulieve Cannabis, Curaleaf Holdings, Cresco Labs, Terrascend Corp, Recv Ayr Strategies, Columbia Care, Innovative Industrial Properties, Jushi Holdings and Harvest Health and Recreation. The downside to this ETF is that many of the companies it holds are traded on the over-the-counter market, which means they face less regulation than those traded on major exchanges like the New York Stock Exchange.
The global AdvisorShares Pure Cannabis ETF claims to be the first actively managed ETF with dedicated marijuana exposure available in the U.S. Its top 10 holdings are Village Farms International, GW Pharmaceuticals, Aphria, Innovative Industrial Properties, Canopy Growth, Curaleaf Holdings, Green Thumb Industries, GrowGeneration, Arena Pharmaceuticals and Columbia Care.
Alternative Harvest ETF
The Alternative Harvest ETF tracks the Prime Alternative Harvest Index, which measures the performance of marijuana companies. It touts itself as the first U.S. and the world largest ETF to target the global cannabis industry.
The fund's top 10 holdings are Aphria, GW Pharmaceuticals, Tilray, Canopy Growth, GrowGeneration, Cronos Group, Village Farms, Hexo Corp, Schweitzer-Mauduit International and Vector Group.
Global X Cannabis ETF
This ETF invests in companies in all parts of the marijuana ecosystem, from legal production, growth and distribution of cannabis and industrial hemp to those providing financial services to the industry. The fund also invests in companies that offer pharmaceutical applications of marijuana, CBD and other related uses.
The fund's top 10 holdings are Aphria, Tilray, GW Pharmaceuticals, Cronos Group, Aurora Cannabis, Organigram Holdings, Sundial Growers, Canopy Growth, RIV Capital and Charlotte's Web.