This article was originally published on ETFTrends.com.
The ETFMG Alternative Harvest ETF (MJ) is higher by nearly 49% year-to-date, making the only cannabis ETF listed in the U.S. one of this year's best-performing non-leveraged ETFs.
With another election year looming in 2020 and some states expected to take marijuana initiatives this year, it pays to remember politics is an important element of cannabis investing.
As the rules and regulations around marijuana begin to loosen, with improving sentiment on the recreational usage on the once highly guarded drug, more businesses are starting to dabble and expand the cannabis industry, and investors can also access the growth opportunity through related exchange traded fund strategies.
“Sen. Cory Booker, a Democratic presidential candidate, is reintroducing a bill that would legalize marijuana at the federal level,†reports MarketWatch. “Four of his fellow presidential candidates, Sen. Elizabeth Warren, Sen. Kirsten Gillibrand, Sen. Kamala Harris and Sen. Bernie Sanders are cosponsoring the bill.â€
In the U.S., MJ is getting a lift from speculation that more states will legalize marijuana for either recreational or medicinal use and that Congress and the White House could soften their stances on the drug being illegal at the federal level. California, Colorado, Nevada and Washington are among the states with thriving legal cannabis industries.
Political Push for Recreational Marijuana
“Ten states and Washington, D.C., have legalized recreational marijuana, and leaders in New York and New Jersey have signaled their intentions to legalize. Local governments cite the racial disparities in criminal sentences for drug offenders, which tend to disproportionately affect blacks and Hispanics, as well as increased tax revenues as reasons for legalization,†according to CNBC.
The ETFMG Alternative Harvest ETF includes a hefty tilt toward Canadian companies, along with a smaller position in U.S. companies. Canada, which recently legalized marijuana for recreational purposes, has several dedicated cannabis ETFs trading there.
However, other developments in the U.S. remain more convoluted. While some states have legalized marijuana, helping mom-and-pop shops crop up around the U.S., the federal government still holds marijuana as a “schedule 1†drug, or the same category as heroin.
Booker's “bill also aims to reverse the damage done to those who were prosecuted for marijuana use by expunging federal crimes and allowing offenders to petition courts for shorter sentences,†reports CNBC. “The sentencing reforms mirror those included in the landmark criminal justice bill that passed last December, known as the First Step Act, which Booker also sponsored.â€
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