Tapping Into New Growth Sectors

Some of our clients have asked that a portion of their portfolio be invested in cannabis-related stocks. It’s impossible to ignore this as a new growth sector. Canada became the first G7 nation to legalize cannabis in October 2018. More US states are legalizing medical and recreational cannabis use, which continues to expand the market.

The industry has grown to the point that there are now a handful of publicly traded companies, most of which are Canadian firms. Investing in individual stocks will come with substantial volatility as this sector matures. Another approach is to invest in funds that contain multiple cannabis-related stocks. There are a small number of cannabis-related exchange-traded funds, and some diversified mutual funds are adding cannabis stocks to their portfolios. Vanguard being out front in this regard.

Please contact your advisor for more in-depth information.

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