Although Bitcoin (BTC) is appointed as one of the investments most profitable of the decade with an increase of more than 19,000% only in the last 4 years, another type of asset has been attracting investors’ attention and repeating the exponential appreciation of the cryptocurrency.
Like the BTC, this new asset class was also criminalized but it is restoring prejudices and earning more and more strength in the financial market and attracting high profitability: marijuana and the hallucinogens.
In the case of cannabis it raised its level as an illicit drug for a serious and promising industry with a sequence of changes in legislation in several countries to release the medicinal or even recreational use of the herb and, with that, companies operating in the marijuana sector have already valued more than 161,900% in the last 4 years .
In Brazil, for example, StartupHero, grew 400% during the pandemic with solutions such as valuation (company valuation) and pitch deck (complete presentation to attract investors).
What stands out is that the company bet on niches of the new economy considered “different”, for example, a partnership with a Cannabis Startup Accelerator which indicates dozens of companies in the sector, aiming at the creation of materials and market evaluation to attract investments.
In 2020, the global legal market for the product reached the mark of US$ 21.3 billion reais, an increase of 48% compared to the previous year, according to the specialized consultancy BDSA.
The cannabis industry is so promising that it has drawn investors’ attention – with the regulation, the expectation is that the Brazilian market can generate 117,000 jobs and move R$ 26 billion by 2025.
In Brazil, one of the specialists in the sector is investor João Piccioni, who recently created a portfolio of shares in the marijuana industry at Empiricus, entitled MoneyRider.
Piccioni points out that there are three types of marijuana stocks that can take off on the stock market because they have some specific triggers, which can be triggered and drive the rise in assets.
Among the types of actions he highlights that of companies that combine marijuana and technology, especially with regard to monitoring and the entire production chain of the industry, since this is one of the bottlenecks between legal supply and illegal planting.
The specialist also points out that it is necessary to keep an eye on companies linked to the places for legal cultivation and indicates real estate investment funds that have properties aimed at controlled planting (greenhouses), renewable energy and transport (railways).
Invest in marijuana
Another investment fund focused on the cannabis market in Brazil is Vitreo with the Active cannabis fund that has an initial investment of BRL 1 thousand, total administration fee of 0.72% per year and no performance fee.
The fund’s portfolio is inspired by the ideas of Empiricus’ “Green Rider” report, the largest independent research house in Brazil, and has an indirect allocation of 80% in cannabis ETFs and 20% in the Cannabidiol fund.
According to George Wachsmann, manager of Vitreo, this is the best moment in history to start investing in the sector. The billion-dollar industry may be about to grow exponentially.
Another investment option is the ETF MJ which is available at Stake and which concentrates global companies involved in the cultivation, production, marketing or legal distribution of cannabis, cannabinoids or tobacco products.
According to a survey by Stake, shared with the Cointelegraph, investments in companies related to Cannabis do not stop growing and shares and ETFs on the segment have been chosen as an investment option by people in Brazil and in several countries.
The most sought after company in the sector by Stake’s clients is Tilray, where shares rise 131% annually. Based in Canada – and also operating in the United States, Europe, Australia, New Zealand and Latin America – it is involved in the research, cultivation, production and distribution of medicinal cannabis and cannabinoids.
The company offers products aimed at lifestyle, food and alcoholic beverages based on hemp, medical cannabis in various formats. In addition, it provides cannabis extract products to patients, doctors, pharmacies, hospitals, governments and researchers.
Next comes another Canadian-based company, Aurora Cannabis, which grows 13 percent a year, which produces and distributes medical cannabis products around the world.
It operates at various stages of the cannabis value chain, including facility engineering and design, cannabis cultivation, genetic research, production, derivatives, high value-added product development, home growing, wholesale and retail distribution.
In the report, the company highlighted the main companies, the amount invested in the shares and the number of people trading them on the American stock exchange.
Amount invested in shares (in dollars)
Number of people trading shares
Aurora Cannabis (ACB)
Canopy Gowth Corporation (CGC)
Cronos Group (CRON)
HEXO Corp. (HEXO)
AbbVie Inc. (ABBV)
Sundial Growers Inc. (SNDL)
Corbus Pharmaceuticals Holdings (CRBP)
Zynerba Pharmaceuticals (ZYNE)
Alternative Harvest ETF (MJ)
Cambria Cannabis ETF (TOKE)
Following this trend of alternative investments and with upside potential, the US stock market recently received the first ETF based on psychedelics such as magic mushrooms, hallucinogenic truffles and psychotropic drugs, the PSY.
Launched at the end of May, the ETF has already grown 3.86% and is the second of its kind in North America. Canada had already received an ETF from psychedelic product companies in January 2021, the PSYK Horizons Psychedelic.
In addition to marijuana funds, psychedelic funds also go into the business of treating rare diseases, eating disorders, and anxiety disorders that grew up in the pandemic.
Among the available funds, the Defiance Next Gen Altered Experience ETF, or PSY (NYSEARCA: PSY), brings together 21 companies, 35% of them “psychedelic companies” such as Compass Pathways (NASDAQ: CMPS), MindMed (NASDAQ: MNMD) and Numinus ( TSXV: NUMI).
The other 65% of the ETF are made up of companies focused on medical cannabis. The index manager says that the companies that make up the ETF must have a minimum market capitalization of US$75 million.
The ETF not only invests in psychiatric drugs but also seeks to encourage research in the sector, whose investments have fallen 70% in the last 10 years, despite the demand having grown. The fund replicates the BITA Medical Psychedelics, Cannabis, and Ketamine index.