The 3 Top-Performing Stocks in Marijuana's Biggest ETF

2019 has been a good year for marijuana stocks so far, and it hasn't taken much effort to profit from investments in the industry. The broad-based marijuana exchange-traded fund ETFMG Alternative Harvest (NYSEMKT: MJ) has produced impressive returns, climbing 45% just since the beginning of the year and attracting more than $1.25 billion in assets.

When you look at the roughly three dozen stocks that the Alternative Harvest ETF owns, you'll find a lot of companies whose shares have risen 50% or more in the first three months of 2019. However, the three top performers among the ETF's holdings have done a whole lot better. Below, we'll take a closer look at how Green Organic Dutchman (NASDAQOTH: TGODF), HEXO (NYSEMKT: HEXO), and OrganiGram Holdings (NASDAQOTH: OGRMF) have outpaced their larger competitors in the cannabis industry and produced returns that have doubled what the marijuana ETF has given its investors.

MJ data by YCharts.

A near-double from the Dutchman

Green Organic Dutchman hasn't hit the radar of some U.S. marijuana investors, because unlike many of its peers, its shares don't trade on a major U.S. stock exchange like the New York Stock Exchange or the Nasdaq Stock Market. Nevertheless, Green Organic Dutchman has made a big impression on the Canadian market, and the company is taking a different approach that could help it build up a loyal customer base over the long run.

The majority of cannabis companies have focused most of their efforts on expanding as rapidly as possible in an effort to boost supply to meet soaring demand. Supply shortages make that strategy look attractive in the short run, but Green Organic Dutchman believes that treating cannabis solely as a commodity could be short-sighted. Instead, the company is aiming at the high end of the marijuana market, touting its organic product line and seeking to maintain premium pricing from customers who are willing to pay up for quality.

That doesn't mean that Green Organic Dutchman is standing still, as it has ambitious expansion plans. But it does mean that many investors have high hopes that the company can become the recognized brand leader when it comes to high-quality cannabis products.

Image source: Getty Images.

HEXO makes a splash

HEXO recently remedied its recognition issue, uplisting to the NYSE and getting the attention of U.S. investors in cannabis companies. The Quebec-based company is a favorite in its home region within Canada, and it's also seeking growth through its recent acquisition of peer Newstrike Brands as well as its partnership with Molson Coors to explore cannabis-infused beverages.