Amplify Seymour Cannabis ETF
CNBS
topped the list of the best-performing ETFs of November with impressive returns of more than 47%.
The rally came primarily post election with Biden’s victory as he is expected to speed up the legalization of marijuana at the federal level, thereby providing a boost to the U.S. cannabis industry. Additionally, five states — New Jersey, Arizona, South Dakota, Montana and Mississippi — legalized marijuana through ballot measures that have broaden the potential market for legal cannabis sales (read:
ETFs to Bet on Biden’s Potential Presidential Victory
).
More legalization indicates the wider acceptance of marijuana throughout the United States. As of now, 36 states have legalized medical cannabis use while 15 states and the District of Columbia have legalized cannabis for adult recreational use.
With increasing adoption, most analysts upgraded their growth outlook for the industry. Cowen projects the legal marijuana market to grow to
$34 billion
by 2025, up from an earlier forecast of $31 billion. Morningstar estimates that annual U.S. cannabis sales will reach $70 billion for the adult-use segment and $15 billion for medical.
Let’s take a closer look at the fundamentals of CNBS.
CNBS in Focus
This ETF is an actively managed portfolio, which invests 80% of its assets in securities of companies with 50% or more of their revenues from the cannabis and hemp ecosystem. The fund holds 23 securities in its basket with double-digit exposure in the top five firms. It has accumulated $11.9 million in its asset base and trades in an average daily volume of 23,000 shares. The ETF charges 75 bps in annual fees (read:
Small-Caps Beat Bigger Peers Last Week: 5 Top ETFs
).
Although most of the stocks in the fund’s portfolio delivered strong returns, a few gained more than 50% last month. Below we have highlighted the five best-performing stocks in the ETF with their respective positions in the basket:
Best Performing Stocks of CNBS
Village Farms International
VFF
:
This Canada-based company is a producer, marketer and distributor of greenhouse-grown tomatoes, bell peppers and cucumbers primarily in North America. It gained 119.3% last month. The stock takes the top position in the fund’s basket with 13.2% share. It has a Zacks Rank #3 (Hold) and VGM Score of C. You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
.
GrowGeneration Corp.
GRWG
:
This Colorado-based company owns and operates specialty retail hydroponic and organic gardening stores. GrowGeneration occupies the second position in the fund’s basket with 12.4% allocation. It also delivered incredible returns of 89.7% last month. The stock has a Zacks Rank #3 and VGM Score of F.
MTech Acquisition Corp.
KERN
:
This Colorado-based company is a regulatory compliance technology company primarily in the cannabis space. The stock surged 74.4% last month and accounts for 0.2% of total assets.
Aphria Inc.
APHA
:
This Canada-based company produces, supplies and sells medical cannabis primarily in Canada. The stock takes the fourth spot in the fund’s basket with 11.3% of the assets. It gained 66.6% last month. APHA has a Zacks Rank #3 (Hold) and VGM Score of F (read:
5 Sector ETFs That Beat the Market in November
).
GW Pharmaceuticals PLC
GWPH
:
This United Kingdom-based biopharmaceutical company is focused on discovering, developing and commercializing therapeutics from its proprietary cannabinoid product platform in a broad range of disease areas. GWPH occupies the fifth position in the fund’s basket with 10.6% allocation. It gained 56.8% last month. The stock has a Zacks Rank #3 and VGM Score of D.
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