New Cannabis Legalization Efforts Could Send these Stocks to Higher Highs

Cannabis stocks could see higher highs on new legalization efforts.

Just last week, according to Marijuana Moment, Rep. Dave Joyce (R-OH) and House Minority Leader Hakeem Jeffries (D-NY) introduced the Preparing Regulators Effectively for a Post-Prohibition Adult-Use Regulated Environment Act (PREPARE) Act.

“With nearly every state adopting its own set of cannabis reforms, an end to federal cannabis prohibition is inevitable,” Joyce, co-chair of the Congressional Cannabis Caucus, said in a press release. “Now is the time for the federal government to respect the will of our constituents and begin the conversation on fair and effective cannabis regulation. The PREPARE Act will give lawmakers a bipartisan platform to legislate not only a fair and responsible end to prohibition but also a safer future for our communities.”

While investors can always buy into pot stocks, like Canopy Growth (CGC), Tilray (TLRY), Flora Growth (FLGC), or even cannabis dividend stocks, like Innovative Industrial Properties (IIPR) and AFC Gamma (AFCG), ETFs offer greater diversification at less cost.

Some of the top ones include:

ETFMG Alternative Harvest ETF (MJ)

With an expense ratio of 0.75%, the MJ ETF tracks the Prime Alternative Harvest Index, designed to measure the performance of companies within the cannabis ecosystem benefitting from global medicinal and recreational cannabis legalization initiatives. Some of its top holdings include Canopy Growth, Cronos Group, Aurora Cannabis, and OrganiGram Holdings.

Global X Cannabis ETF (POTX)

With an expense ratio of 0.50%, the ETF seeks to invest in companies across the cannabis industry. This includes companies involved in the legal production, growth and distribution of cannabis and industrial hemp, as well as those involved in providing financial services to the cannabis industry, pharmaceutical applications of cannabis, cannabidiol (i.e., CBD), or other related uses. Some of its top holdings include Canopy Growth, HEXO Corp., and AFC Gamma.

Advisor Shares Pure US Cannabis (MSOS)

With an expense ratio of 0.73%, the ETF is the first actively managed U.S.-listed ETF with dedicated cannabis exposure focusing exclusively on U.S. companies, including multi-state operators. The portfolio manager allocates across an investable universe of U.S. companies spanning a variety of cannabis-related businesses. Some of its top holdings include Green Thumb Industries, Curaleaf Holdings, Cresco Labs, Jushi Holdings, and GrowGeneration Corp.