U.S. Marijuana Index, compiled by Marijuana International Corporation, has delivered 158% returns over the past one year, as of October 17, 2018. Though the market saw a lot of volatility in marijuana policy during the course of the year on account of hard line policy stance taken by the new U.S. government, more recent developments seem to have been encouraging to marijuana investors. Even though it has been fueled by the Trump rally, the S&P 500 has over the past year generated only 9.78% returns.
Graph Credit: marijuanaindex.com
With 30 states, and Uruguay and Canada having voted to legalize some form of marijuana, the opportunities for business have increased and that makes for a good reason to invest in companies that work in this space. (See also: The Economic Benefits of Legalizing Weed.)
The marijuana index is equally weighted among 16 companies that have at least 50% of their operations focussed on the marijuana business. In order to qualify for the index, companies need to maintain an average Trading Score of 20 over the previous quarter. This score is calculated based on a weighted average of individual scores given to each company at the end of every trading day in three categories- market capitalization, daily trading volume and share price. See the full methodology here. The index is rebalanced quarterly.
Most stocks on the index are listed in the over the counter or OTC markets which perhaps adds to the risk accompanied by investing in them. However, there are others as well. One of the largest companies on the index is U.K. based firm GM Pharmaceuticals (GWPH) that commands a market cap of close to $3.76 billion but trades on the NASDAQ via an American Depository Receipt (ADR). Another one, Innovative Industrial Properties (IIPR) is listed on the NYSE.
These are the stocks that make up the U.S. marijuana index:
|Company||Ticker||Market Cap (In Millions)|
|GW Pharmaceuticals Plc||GWPH||$4,079.53|
|Liberty Health Sciences Inc||LHS:CNX||$498.34|
|Green Thumb Industries Inc||GTII:CNX||$424.88|
|iAnthus Capital Holdings||IAN:CNX||$409.54|
|MPX Bicuetical Corporation||MPX:CNX||$342.54|
|Charlotte's Web Holdings Inc||CWEB:CNX||$271.94|
|MedMen Enterprises Inc.||MMEN:CNX||$202.36|
|Terra Tech Corp||TRTC||$150.88|
|Innovative Industrial Properties Inc||IIPR||$149.48|
|Golden Leaf Holdings Ltd||GLH:CNX||$142.81|
|Cannex Capital Holdings Inc||CNNX:CNX||$112.06|