As barriers to investing in cannabis continue to remain difficult to overcome more would-be cannabis investors are looking for alternative ways to get into the market, such as ETFs or via companies such as GreenStar Biosciences Corp. (CSE: GSTR)
As the stock price of big players increase and huge returns become more difficult to achieve investors are taking an interest in alternative ways to invest in the cannabis market such as investment funds, or stocks that give them access to more than just one asset.
What are ETFs?
Exchange Traded Funds, or ETFs, is essentially just an investment fund that also trades on the stock market. These tend to be thematic in nature and have seen a rise in popularity with many investors. This is in part because they offer easy exposure to niche, or emerging markets and offer a relatively high ROI at what is perceived as a reduced risk profile.
ETFs are diverse and highly customizable. This suits many younger investors who are not interested in funds that might include arms companies, fossil fuels or other ethically dubious companies. They also cater to the desires of investors to become involved in emerging, or underfunded, sectors and have carved an important niche.
ETFs help break the barriers to cannabis investment
Horizons Medical Marijuana Life Science (HMMJ) was one of the first ETF to offer exposure to shares of companies operating in the medical marijuana industry, demonstrating its success through rapid growth since its inception. The fund, after having completed its first year in the stock market, managed to revalue of 58.6%, making it the ETF with the best results in Canada in this last year.
On April 4, 2017, it began trading in the 10 dollars under the symbol HMMJ on the Toronto Stock Exchange and during its first days rose more than 5%. Twelve months later it trades at $15.55. However, it reached 23.11 dollars on 28 January, when its assets under management reached 863 million dollars.
The cannabis industry in Canada continues to grow rapidly. When HMMJ was launched last spring, there were fewer than 45 companies licensed to access medical marijuana in the country. By March 31, 2018, nearly 100 companies had such licenses, more than double the previous year. By 2021, the North American marijuana market is expected to grow to $24.5 billion in sales.
GreenStar offers an alternative approach
The main downside of ETFs is that they don’t often offer support or expertise as part of their offering. That is where companies such as GreenStar Biosciences Corp. (CSE: GSTR) come in. Rather than simply identifying high yield stocks GreenStar identified high-potential regional players in the U.S. cannabis stock and helps guide these companies to success.
GreenStar’s management team has a solid background in Canadian cannabis market and knows all the mistakes which can be done in this business. They use their expertise to identify cannabis companies with the best potential and provide them with the resources they need to carve a place in their local and neighboring markets.
GreenStar’s first partner tenant companies is Washington state-based Cowlitz, a producer and distributor of high quality cannabis products. Cowlitz is a state leader and consistently records a quarterly revenue of $4 million while growing. Last year they reported an impressive revenue of $14.6 million in just five years of operations.
GreenStar aims at becoming the key cannabis player on the market with access to North America’s top companies from all aspects of the product life cycle (seed, processing, packaging, transportation, distribution). Companies like GreenStar Biosciences create a great opportunity for investors to profit from the best marijuana companies in the sector with just one stock.
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