The Marijuana Index Is Up 54% This Month

Investors are getting high off marijuana stocks in anticipation of full legalization in Canada and several U.S. states. The marijuana investment universe lends itself well to cryptocurrency traders who have grown accustomed to volatility and surging market caps.

Marijuana Index

The Marijuana Index, which covers leading cannabis investments on both sides of the Canada-U.S. border, rose 7% on Monday to close at 174.82. That was the index’s highest level on record. Total trade volumes were $148.8 million.

Penny stocks listed on the Marijuana Index were the best performers on Monday. Namaste Technologies Inc. (N) added more than 55%, Golden Leaf Holdings Ltd (GLH) rose 22.5% and Marapharm Ventures Inc. (MDN) finished nearly 22% higher.

More established brands like Aphira Inc. (APH) and Aurora Cannabis Inc. (ACB) also put up firm gains, climbing 18.1% and 14%, respectively. Both companies turned a profit in their most recent quarter, with medical grower Aphira becoming a consistent earner in an industry still in adolescence. Aphira has managed to stay profitable despite scaling up its growth capacity through major investments in infrastructure.

Canada’s more established Marijuana Index rose 11% on Monday. The U.S. average added 2.1%.

The North American Index’s 35 constituents have combined for gains of 54% over the past 30 days, a sign that investors are getting excited about legalization.

Canada’s Legalization Campaign

Canada’s Trudeau government plans to lift a ban on recreational weed next July. Provincial governments are already gearing up for the official roll out, a process that includes setting market prices. Various governments are converging on a price point of $10 per gram for recreational cannabis. Canada’s parliamentary budget officer recently said the average price of weed in Ontario is $8.64 per gram.

The campaign to legalize cannabis by the summer came one step closer on Monday after the House of Commons passed Bill C-45 by a vote of 200-82. The bill now moves to the Senate, where Conservatives are expected to put up a fight.

Prior to the vote, Justice Minister Jody Wilson-Raybould said the approval of Bill C-45 is an “important milestone” in the government’s push for legalization. Canada is embarking on full legalization of recreational weed to ensure that profits aren’t funneled into the black market.

Canada’s marijuana industry is undergoing a major face lift in anticipation of legalization. That path entails key mergers and acquisitions in order to stave off heated competition.

A recent report from Ernst & Young indicated that many industry players “believe that consolidation is inevitable, leaving a few large players post-legalization.” This ‘adapt or die’ mindset is often characteristic of fast-growing industries. Marijuana, which is expected to rival broadband internet and cable TV in terms of growth, is no exception.

As legalization continues, marijuana investments will become more mainstream. Beginning Dec. 26, investors will be able to get their hands on the Alternative Agroscience ETF, which tracks companies primarily engaged in the cultivation, production and distribution of cannabis-related products. This U.S. investment vehicle will be available via NYSE subsidiary and will only track companies operating in states where cannabis is legal.

Disclaimer: Author has no active investments in the marijuana industry. 

Featured image courtesy of Shutterstock. 

Chief Editor to and Contributor to, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi