The term green rush has been used in America for a while now. This is attributed to the booming marijuana business that is expected to grow steadily over the years. This has prompted many states today to keep legalizing medical marijuana and eventually recreational marijuana. It was high time that a fund existed to help the individual investors to start pumping more money into the marijuana sector. It seems like the prayers of many have been answered. It is expected that the first U.S. Exchange Traded Fund or ETF to be launched on December 26. The ETF would focus solely on the marijuana stocks to give people the investment options many have long for over the years.
The launch of such a fund will come just a few days before California can legalize the use of recreational marijuana as from January 1. Well, as much as it will be launching on the suggested date, it is not a new fund. The fund is simply being made better and a few changes had to be implemented to make it available to those who need it. The Tierra Funds will convert to Tierra XP Latin America Real Estate ETF, currently trading under LARE symbol into the new Alternative Agroscience ETF.
The president of Sarasota Capital Strategies, Anthony Welch, likens this green rush to the early days of the internet. Many companies failed with only a few making success in the internet business. But today the internet has now spread to the whole world and some people cannot live without it. It is the same to the operations of some companies. He further says that bringing in the new fund will make it possible for better marijuana business. It is expected that the fund will be look much different even if it is 20 years from today.
One of the common problems with creating and managing the cannabis stocks is because most of them are small penny stocks. This means that they do not have the trading volume that the ETF would need to be successful. Welch advises that people should not just jump onboard unless they understand how it works. It is expected that things could get volatile quickly before they can stabilize later.
If the U.S. investors can be interested in the ETF like the Canadians, then it would not take long for the Alternative Agroscience ETF to grow like weed. The Horizons Medical Marijuana Life Sciences ETF in Toronto might have been the guideline to get a similar fund in America. The ETF has attracted over $243 million since it debuted in April. It is quite an increase of 31% by December 1.
The potential stock holdings
Now that you know more about the fund, what about the potential stock holdings? Tierra is yet to approve the list of stock holdings that most would want to use for investing. Besides the cannabis growers, there is also the need to check on the companies that make fertilizers, the growing equipment, greenhouses, or any other ancillary products important for the marijuana sector.
ArcView Market Research has projected a compounded annual growth rate of the marijuana is going to be faster than when cable TV was introduced in the 90s. It seems many people are interested in making their investments before the growth of marijuana stocks plateaus. The firm has estimated that the North American cannabis markets will go from making $6.7 billion in 2016 to about $22.6 billion by 2021. That is quite an increase. You can now see why many people are willing to invest more in the sector to cash out on such growth rates.
There was a time when most people did not have broadband. The quick growth of broadband was seen in the 2000s when most people felt like it was a basic need just like television and electricity. With the existing structures, the spread of broadband was not a problem. It was growing at an average rate of 29% per annum. The same growth rate can be attributed to marijuana. Since many states started legalizing it, many more have followed and thus making the marijuana sector to grow as fast as broadband did.
It is expected that by 2025, the medical marijuana market would reach $55.8 billion in revenue. This has not factored the sales from recreational marijuana. It means that the value could even be more.