Marijuana News Today: Marijuana ETF Surpasses $1.0 Billion in Assets

marijuana news today 10 september
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Marijuana News Today

The marijuana news today is another milestone for the industry, with Horizons Marijuana Life Sciences Index ETF (OTCMKTS:HMLSF, TSE:HMMJ) having become the first marijuana exchange-traded fund (ETF) to reach $1.0 billion in managed assets.

“When we launched HMMJ in April of 2017, we knew there would be significant interest in a Marijuana companies ETF – given the tremendous potential of the sector,” said Steve Hawkins, President and CEO of Horizons.

“HMMJ’s growth has far exceeded our expectations as investors have strongly supported the sector in anticipation of Canada’s upcoming recreational marijuana legalization.” (Source: “World’s First Marijuana ETF Reaches $1 Billion in Assets,” Horizons Marijuana Life Sciences Index ETF, September 7, 2018.)

That strength of HMMJ and its rapid growth speak to the growing desire among investors to find new opportunities in the legal marijuana sector rather than picking individual stocks, which carries a higher risk.

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After all, the marijuana industry is one of the most volatile sectors around. Putting all your eggs in one basket, so to speak, can be nerve-racking.

An ETF, conversely, offers investors the opportunity to invest in the marijuana industry while taking on a lesser degree of risk while still gaining exposure to a rapidly growing bundle of stocks.

“One of the key drivers of HMMJ’s rapid asset growth speaks to the investor demand and desire for a diversified portfolio of Cannabis companies versus buying individual stocks,” said Hawkins.

“While there are clearly leaders in the Marijuana equity sector, nobody knows for sure which companies will truly be successful over the long term or even be swallowed-up. HMMJ’s one-ticket, diversified investment solution has become very popular with investors looking to get broader exposure to the sector while mitigating single-stock risk without being subject to any active management bias.” (Source: Ibid.)

What This Means for Marijuana Stocks Long-Term

The marijuana industry is still in its infancy, but the marijuana news today shows that it is quickly growing up.

The proliferation of diversified investment opportunities—whether via ETFs, marijuana stocks on major exchanges, or ancillary industries like pot tech—speaks to this swift maturation of the sector.

ETF investing is often considered one of the best ways to play the marijuana stock market. After all, taking a flyer on a single stock carries with it inherent risk, since the company could see its fortunes change in an instant due to any number of factors.

An ETF, on the other hand, tracks overall industry trends due to its broad base of investments, allowing investors to benefit from the volatile marijuana market while mitigating some of the risk.

That a marijuana ETF has now surged past $1.0 billion in managed assets shows that investors are not only growing in number, but the amount of capital flowing into the industry is similarly growing.

And that is great news for marijuana stocks. It will help push stock prices higher and provide the necessary cash to fund further growth.

Tilray Stock

Speaking of new opportunities in the marijuana industry, the marijuana news today on the pot stock market features Tilray Inc (NASDAQ:TLRY), the first ever pot company to have an initial public offering (IPO) on the Nasdaq, as it continues its astronomical rise.

Tilray stock was up about 11% in early-morning trading today, after gaining about 12% last week. Part of that surge was being driven by a flurry of deals that the company has signed.

Last week, the company penned a deal with Namaste Technologies Inc (OTCMKTS:NXTTF, CVE:N) that sees Tilray sell bulk medical cannabis products to Namaste, which would in turn distribute said products via its e-commerce platform. (Source: “Namaste Signs Cannabis Purchase Agreement With Tilray,” Business Insider, September 7, 2018.)

Today, Tilray stock has been benefiting from another deal, this one signed with Supreme Cannabis Company Inc (OTCMKTS:SPRWF, CVE:FIRE). Supreme Cannabis will provide dried cannabis to Tilray in a deal valued at CA$2.0 million. (Source: “Supreme Cannabis Signs Cannabis Supply Agreement with Tilray,” Cision, September 10, 2018.)

It’s not a game-breaking deal, but does show Tilray Inc’s increased enthusiasm in making deals, especially now as it continues to receive huge injections of cash due to its massive stock growth.

Supreme Cannabis stock, meanwhile, is up about 13% in early-morning trading.

Hexo Stock

Another marijuana company that is seeing huge gains to start the day is Hexo Corp (TSE:HEXO, OTCMKTS:HYYDF). The company was up about 10% in early-morning trading, and up nearly 35% over the past week.

HEXO stock is being boosted by the investment firm Riposte Capital releasing a public letter outlining all the ways it believed the stock to be undervalued.

The move has prompted a rush of investors flocking toward an already very strong stock, with Hexo’s share price soaring as a result.

“Our management team is continuously evaluating incoming offers and acquisition opportunities,” said Sébastien St-Louis, co-founder and chief executive of Hexo Corp.

“We look forward to revealing our plans to move into the international market and to list on a major U.S. stock exchange in the near future.” (Source: “U.S. shareholder presses pot firm HEXO to boost stock price or sell,” The Globe and Mail, September 6, 2018.)

TLRY & HEXO Stock Performances

On the chart below are the recent performances of the stocks for Tilray Inc (blue line) and Hexo Corp (black line):

Chart courtesy of StockCharts.com

Analyst Take

The marijuana news today shows growth in a number of areas on the pot stock market.

While traditional marijuana stocks continue to see their share prices rise at impressive rates, the addition of powerful ETFs is only going to further aid the industry growth by allowing for new avenues for investment.

Overall, the start to this week in the marijuana industry has been a strong one, and as we near Canadian marijuana legalization on October 17, we’re likely to continue to see impressive growth in the sector.