Investors in Canada's cannabis sector have certainly seen quite the volatility in recent months, as investors continue to contemplate how legalization will impact demand for the green commodity domestically, and how Canadian cannabis producers will effectively be able to take over global market share in a global marketplace which is not entirely open for business at the moment.
One of the most popular exchange traded funds (ETFs) tracking the broader Canadian cannabis sector (as well as a few publicly traded firms globally which are in a related space, such as fertilizer companies, etc.) is the Horizons Marijuana Life Sciences ETF (TSX:HMMJ).
This ETF generally acts as a pretty decent proxy for the sector overall, and as such, is often used by analysts and investors alike to gauge investor sentiment and momentum trajectory for a basket of weed producers out there.
Since hitting an all-time high of $25.56 earlier this year (the ETF is barely one year old), investors are able to pick up shares of HMMJ below $17 per share, a drop of approximately 35% from the fund's peak.
While many may continue to be bullish on the long-term prospects of this sector, at current levels, I find the argument that an exponential rise in demand will allow for further valuation increases to be unattainable.
I continue to be bearish on this sector, and will be watching the ETF, and the sectors largest players, very closely in the upcoming quarters.
Invest wisely, my friends.
