Investors are flocking to a U.S.-listed exchange-traded fund (ETF) that tracks nearly 40 Canadian and American cannabis firms.
The $436 million ETFMG Alternative Harvest ETF – which trades on the NYSE Arca under the ticker symbol MJ – has taken in around $22 million in August, putting it in a position to post its largest monthly inflow since February, according to Bloomberg.
Of the 38 publicly traded cannabis companies tracked by Alternative Harvest, about 60% are Canadian firms.
Cannabis stocks have been climbing in recent weeks as Canada nears the launch of its recreational market in October and Big Alcohol firms step up their interest and investments in the industry.
In mid-August, Constellation Brands invested $3.8 billion in Smiths Falls, Ontario-based Canopy Growth, which is Alternative Harvest’s largest holding.
Earlier in August, Molson Coors Brewing Co. announced a joint venture to craft a nonalcoholic cannabis-infused beverage with Quebec-based The Hydropothecary Corp.
Meanwhile, United Kingdom-based liquor giant Diageo – maker of Guinness beer and Crown Royal Canadian whisky – is in talks with at least three Canadian cannabis firms, according to Bloomberg.
“We expect more alcoholic beverage companies to announce deals with Canadian (licensed producers) over the course of the year,” Vivien Azer, an analyst with Cowen & Co., wrote in a recent note to clients.