It’s high time individual investors have a diversified fund to quickly and easily invest in the so-called green rush and get a toke of America’s fastest-growing industry. The first U.S. exchange-traded fund, ETF, to focus on marijuana stocks is launching Dec. 26 — days before California legalizes recreational cannabis use on January 1. It’s not actually a new ETF though. Tierra Funds is converting the Tierra XP Latin America Real Estate ETF, trading under the symbol LARE, into the Alternative Agroscience ETF.
“I see this as something like the early days of the internet where many companies failed, and a few grew into massive success stories,” says Anthony Welch, president of Sarasota Capital Strategies in Osprey, Fla. “As with the internet, the makeup of a cannabis fund today will look much different than the same fund 20 years from now.”
One of the biggest challenges in creating and managing an index of cannabis stocks is that most of them are small penny stocks, which don’t have the trading volume a successful ETF needs, says Welch. Don’t jump aboard unless you can stomach roller coasters because it will likely be very volatile.
– Read the entire article at Forbes.