Please ensure Javascript is enabled for purposes of website accessibility

2 Cannabis ETFs All Investors Should Consider Buying

By Eric Volkman - Feb 21, 2021 at 2:00PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Do you want broad exposure to the marijuana sector? If yes, then take a look at this winning duo.

Exchange traded funds (ETFs) are a very popular investment option these days. That's because they're ideal for investors who want exposure to an economic sector or index, but aren't inclined to pick individual stocks.

In this segment from Motley Fool Live, veteran Fool.com contributor Eric Volkman and healthcare and cannabis bureau chief Corinne Cardina identify two specialty marijuana ETFs for those who want some pot in their portfolio. This video was recorded on Feb. 5, 2021.

Corinne Cardina: Lea asks, "Is there a cannabis ETF that you can suggest?" If you do not want to pick and choose cannabis stocks, maybe you've been burned before, understandably. I have two in mind, Eric, I'll see if you know any.

The one that I typically compare socks to when I'm looking at whether a stock outperformed or underperformed the broader cannabis market is the Horizons Marijuana Life Sciences [Index] ETF (HMLSF -0.13%). That is one option. That one is up almost 54%, if you look over the full past year.

Then there's also a new one called Cambria Cannabis ETF (TOKE -2.12%). That one, the ticker is TOKE. That one has more tobacco stocks. I interviewed someone from Cambria a couple of months ago and he gave me his pitch for that one. Eric, what am I not thinking of, while I toss these tickers in the chat?

Eric Volkman: I like both of them. I have to confess, I'm not so familiar with the ETF world, I'm more familiar with individual weed stocks.

I know Horizons a little bit. I think that's a good play, I got the impression that that was pretty well allocated across the sector, and across different types of marijuana companies. I think if you want to play marijuana and you don't want to get down into the whole "this company versus that company," [consideration] I think Horizons is a pretty solid pick.

If you look at their performance, 54% is better than even some of these more bullish companies that have seen a lot of attention lately. Also, because Horizon has a fairly big basket [of investments], relatively speaking. I think, generally, they're going to rise nicely along with the general optimism for pot stocks with the whole decriminalization/legalization wave.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Cambria ETF Trust - Cambria Cannabis ETF Stock Quote
Cambria ETF Trust - Cambria Cannabis ETF
TOKE
$9.24 (-2.12%) $0.20
Horizons Marijuana Life Sciences Index ETF Stock Quote
Horizons Marijuana Life Sciences Index ETF
HMLSF
$3.39 (-0.13%) $0.00

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
330%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/22/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.