Is it Time to Buy This Cannabis ETF Again?

The Canadian cannabis space has sputtered along since recreational legalization became a reality in October 2018. Investors saw massive gains after the Trudeau Liberals came to power promising legalization in 2015. They would deliver on that promise, but sentiment for the sector has quickly turned sour. The legalization rollout was chaotic and inconsistent due to different provincial standards. Moreover, early supply issues quickly turned into a supply glut that has been exacerbated by the lingering black market.

Despite this, the hope for federal legalization in the United States has spurred optimism for cannabis stocks. Canadian investors seeking broad exposure to this space may want to consider the Horizons Marijuana Life Sciences ETF (TSX:HMMJ). This was the world’s very first cannabis focused exchange-traded fund (ETF). Its shares have plunged 44% in 2022 as of close on November 21.

Cannabis investors should recognize many of the top stocks in this fund. Some of those top holdings include Jazz Pharmaceuticals, Cronos Group, Tilray Brands, and Canopy Growth. In the second quarter of fiscal 2023, Canopy Growth delivered net revenue growth of 7% from the previous year. Meanwhile, it unveiled a comprehensive plan to fast track entry into the cannabis market south of the border. Progress on that front could blow this industry wide open in the middle of this decade.

This ETF has increased 14% in the month-over-month period. Investors looking to take advantage of this renewed momentum should consider snatching up this cannabis ETF in late November.