HMMJ

https://www.horizonsetfs.com/ETF/HMMJ#

I'm considering an investment in HMMJ but wanted to get the wisdom of the crowd before I do so.

I know cannabis is going to be a huge industry and want to invest in that pace.

Country-wide legalization of cannabis for recreational use is supposed to begin in Canada on July 2018 assuming the bill is passed by the senate before then.

None of the individual stocks look like a great investment which is why I'm turning to an ETF.

Questions:

1. What are the reasons you would NOT buy HMMJ?
2. What are the reasons you would buy HMMJ?
3. How do you buy HMMJ? I use fidelity but do not see a way to purchase HMMJ. I know fidelity is supposed to be able to trade on international exchanges but perhaps that's a feature that they have to enable.
4. What is your favorite marijuana ETF , Mutual Fund and/or individual stock and why?

Thanks

Comments

  • https://seekingalpha.com/article/4123958-new-marijuana-etf-way

    If Canada gets the senate to pass the marijuana bill that has already passed in the house the recreational sales can begin in Canada country wide July / 2018. MJX is about the same etf that trades on the tsx under hmmj. I want to invest in the industry but it feels like the early days of the internet and you don’t know what companies will survive the bubble burst. Investing in an etf gives me some comfort. It’s a bit speculative but I feel like the world is coming around to this being a legit industry.
  • ACCBF Is the largest cannabis company in Canada.
    I would say if in doubt , go with the biggest and most successful.
    Be aware it jumped 500% recently. Good luck.
    Maybe you should just go into the SP 500..
  • Canopy Growth is the largest cannabis company in the world which is the second largest holding in the MJX ETF. Like I said most of these companies will not survive the mary-jane-bubble which is why this investment is speculative. If you look at any company individually they will not pass a fundamental analysis.

    http://quote.morningstar.ca/Quicktakes/stock/keyratios.aspx?t=WEED&region=CAN&culture=en-CA&ops=clear

    Even after a 500% increase I think there's still room for companies like Canopy Growth to go up another 500%.
  • edited January 11
    I was looking into HMMJ as well but will wait a bit as I realized that the fund average P/E is currently 81.
    Although I believe in the long term potential (how could I else,being Dutch) it looks pretty bubbly to me.
    From the top 5 holdings I think only one or two are profitable with high P/E (Aphria's P/E is 162).
  • edited January 12
    HMMJ is fine if you don't want to do any due diligence and want diversification. The US ticker is HMLSF - that's what you'd buy. There is a US etf that just was released several days ago: MJX, but from my research, HMMJ is a better choice for investing in Canadian Marijuana. That being said, you'll reap the rewards if you dig in a little more and invest in individual names. Most of these are dual-listed and have US tickers if you are American and are investing with USD.

    I've been actively trading the Canadian marijuana sector the past 4 months and have made excellent returns. The hype has been real. Reminds me of cryptocurrency hype. The sector has run up very high on the speculation of future earnings potential. Not a doubt in my mind that the Canadian Marijuana sector will be an excellent investment long term. However, after being involved with this big run-up I'm at the point that I'm ready to run away with my profits and wait for Mr. Market to show me some deals before I enter long-term again. I am currently only tactically swing trading the volatility.

    The sector has been driven to what is now seeming like very lofty valuations based on what these companies *could* be selling when rec. legalization starts. The hype could definitely continue but if you're entering now without utilizing a stop-loss, your're gambling in my opinion. I am almost willing to guarantee you'll find a better entry price between now and legalization if you're patient. I made the mistake of buying HMMJ when it was first released and was holding the bag all year when I could have gotten in much lower. Dollar cost averaging would be your friend here too.

    There are going to be some significant catalysts that will move the share prices over the next few months. For example, the legalization date has not been nailed down and the Gov. has already made it clear it's going to be pushed beyond the original date of July 1st 2017 - speculation of only a couple months at the moment but who knows how long for sure. Between now and then, there will also continue to be lots of news releases on these companies that will create volatility. Takeovers, mergers, dilution, expansion, etc.

    Also, unless you have insider info or do some serious due diligence please stay away from the small cap names that have run up multiple hundreds of percent. I was fortunate enough to make some great money swing trading these but they're highly speculative and most of them have delusional financials right now.
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