What Stocks are on the Marijuana Index? – Investopedia

U.S. Marijuana Index, compiled by Marijuana International Corporation, has delivered 35.6% returns over the past one year, as of April 18. This despite recent volatility in marijuana stocks on account of hard line policy stance taken by the new U.S. government. Even though it has been fuelled by the Trump rally, the S&P 500 has over the past year generated on 12.47% returns. (See also: The First Medical Marijuana ETF Has Launched.)

Graph Credit: marijuanaindex.com

In anticipation of the vote on legalization of marijuana in many states on November 9, the index hit a 52 week high on Oct 31, 2016 reaching the highs of 110.64 points. It is currently trading close to 70 point level. With more states voting 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 has a market cap of more than $5 billion and is equally weighted among 20 companies that have at least 50% of their revenues coming from the cannabis or hemp industry and their stocks meet certain trading requirements prescribed by MJIC. The index is balanced quarterly and added 5 stocks in its last revision in March.

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 $2.9 billion but trades on the NASDAQ via an American Depository Receipt (ADR). Another one, Innovative Industrial Properties (IIPR) is listed on the NYSE.

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