Purpose Marijuana Opportunities Fund Provides Exposure to North American and Global Pot Stocks
MJJ ETF Has Likely Bottomed and Could Be an Excellent Value Buy at These Levels
Purpose Marijuana Opportunities Fund (NEO: MJJ) is Canada’s first actively managed Cannabis ETF which invests in all facets of the global marijuana industry including cultivation, extraction, retail and even financing. The fund also has the ability to invest in private companies and initial public offerings (IPO). MJJ ETF is managed by Greg Taylor, the Chief Investment Officer of Purpose Investments.
The company’s website describes Taylor as a “data-driven manager with a focus on managing risk through active-trading strategies.” Taylor specializes in “finding and exploiting pockets of volatility in the market to drive returns.”
Over the past 15 years, Greg Taylor has spent time managing the assets of both mutual and pension funds while working at Aurion Capital Management. Taylor has received multiple awards for his portfolio management which includes the BrendanWood International “Top Gun” award.
The Purpose Marijuana ETF was created to offer investors exposure to the burgeoning global cannabis industry, allowing them to tap into the huge growth potential of the sector while limiting the volatility commonly associated with pot stocks. Taylor uses an active selection process to invest in cannabis stocks with attractive growth and valuation metrics while focusing on marijuana markets that have a positive regulatory environment. The fund manager also employs a disciplined risk management strategy and has the ability to tactically use cash as a defensive tool.
- Registered Retirement Savings Plan (RRSP)
- Tax-Free Savings Account (TFSA)
- Registered Retirement Income Fund (RRIF)
- Registered Education Savings Plan (RESP)
- Dividend Reinvestment Plan (DRIP)
- Pre-Authorized Contribution (PAC)
- Systematic Withdrawal Plan (SWP)
As you will see from the list of the Cannabis ETF‘s top 10 holdings below, the fund has invested in a strong mix of the cannabis industry’s most promising pot stocks. As of December 31, 2019, 43.77% of the fund has been invested in U.S. cannabis equities, 42.47% has been allocated to Canadian cannabis stocks, 0.7% in European companies and 13.06% is sitting in cash. Broken down further by sector, 81.89% of the fund is cultivation, 5.05% in extraction and as previously mentioned, 13.06% in cash.
* As of December 31, 2019
- Charlottes Web (TSX: CWEB) (OTCQX: CWBHF)
- Curaleaf Holdings (CSE: CURA) (OTCQX: CURLF)
- Green Thumb (CSE: GTII) (OTCQX: GTBIF) (FRA: R9U2)
- GW Pharmaceuticals (NASDAQ: GWPH)
- Harvest Health (CSE: HARV) (OTCQX: HRVSF)
- Medipharm Labs (TSX: LABS) (OTCQX: MEDIF) (FRA: MLZ)
- Organigram Holdings (TSX: OGI) (NASDAQ: OGI) (FRA: 0OG)
- Trulieve Cannabis (CSE: TRUL) (OTCQX: TCNNF)
- Valens Groworks (TSXV: VLNS) (OTCQX: VGWCF) (FRA: 7LV)
- Village Farms (TSX: VFF) (NASDAQ: VFF) (FRA: 02V)
MJJ ETF Price Action and Chart
Shares of MJJ ETF closed trading today at $17.44 per share, up 1.04% on the day. The ETF, which trades in the general direction of the cannabis market has declined over 51.8% since reaching an all-time high of $36.18 in late April 2019.
With the cannabis sector believed to be bottomed out, a quick look at the chart below seems to indicate MJJ could be set up to reverse its downtrend and begin a new uptrend. We believe this fund has a strong portfolio manager and the best mix of North American pot stocks compared to its ETF peers. Those looking for a well-diversified cannabis ETF with strong management and large upside should consider investing in the Purpose Marijuana Opportunities Fund ETF.
Disclosure: The Cannabis Investor does not hold a position in any of the stocks mentioned in this article.