Cannabis ETFAmerica’s cannabis market is ready for a boom in 2021, with more states enacting the legalization of both recreational and medical cannabis. During the General Election, Montana, New Jersey, Arizona, South Dakota, and Illinois joined a growing number of states where cannabis is now legal. Texas is also considering legislation that would decriminalize the popular recreational and medicinal drug.

For cannabis ETF investors, this is big news, as it suggests that legal sales will increase in 2021. It could boost many of the beleaguered cannabis stocks that have struggled to generate returns during the Coronavirus Pandemic. Investors looking for exposure but lacking the time or even experience to investigate individual picks can consider the Global X Cannabis ETF (NASDAQ: POTX) fund instead.

This exchange traded fund seeks to capitalize on growth and returns in the largest cannabis stocks. Its holdings include Aphria Inc., Canopy Growth Corp., Cronos Group Inc., and GW Pharmaceuticals PLC. These holdings span recreational producers as well as biotech companies that develop therapeutics from cannabis.

The fund has a low expense ratio, keeping the returns high. The current yield of 6.28% outperforms the majority of single-pick cannabis stocks. The price has hit as high as $17.78 in the last year, suggesting that there could be a strong upside to come in 2021. For investors who buy at today’s bargain price, this fund could create both income and an opportunity to sell once it climbs.

Key Data:

  • Net Expense Ratio: 50%
  • Total Assets: $20.05M
  • Dividend Yield: 28%

All information is based on current and historical market data, as well as publicly available financial data. As with any financial decision, your own research is important. Stock market outcomes can never be 100% accurately predicted. Familiarity with historical data, individual industries, and individual stocks is key to developing a robust portfolio. Note that stock prices can fluctuate rapidly during trading sessions.