A tremendous amount of attention has been given to the publicly traded cannabis space of late, and for good reason. The upcoming inauguration of a Biden Administration, along with the recent flipping of the Senate from a Republican majority to a Democratic majority has the market anticipating cannabis legalization in the U.S. to an extent not previously seen.
Such legalization efforts could take this sector much higher in the near-term. Despite a relative lack of exposure to the U.S. market from most Canadian cannabis producers, the fact that many of these companies are publicly listed has allowed for a vehicle for investors to speculate with.
Expectations that Canadian producers will begin to acquire and merge with U.S. entities to ramp up their exposure south of the border remain high. I do think that there are specific picks within the Canadian markets that are well-positioned to take advantage of this trend. In that regard, I really do think investors need to be stock pickers right now in the cannabis space.
That said, for those seeking diversification, the exchange traded fund (ETF) Horizons Medical Marijuana Life Sciences ETF (TSX:HMMJ) continues to be the best ETF to track this broad cannabis trade right now. This ETF has seen a very impressive run of late, reflecting newfound optimistic sentiment in this sector. For those who believe such sentiment is likely to continue for some time, this is one way to play this trade in 2021.
Invest wisely, my friends.
