Korean sovereign fund buys into cannabis as Canadian fund slashes Canopy stake

South Korea’s sovereign wealth fund bought up three Canadian cannabis stocks as they dipped to 52-week lows in the first quarter of 2020.

Though the value of the cannabis holdings is a modest $8 million, it is the latest sign the stigma associated with the legal industry is slowly eroding in international finance circles.

Seoul-based Korea Investment Corp. (KIC) added federally licensed Ontario producer Cronos Group to its portfolio, according to a disclosure filed with the U.S. Securities and Exchange Commission.

The sovereign wealth fund took on 45,800 Cronos shares, worth roughly $257,000.

The KIC also increased its positions in Alberta-based Aurora Cannabis and Ontario-headquartered Canopy Growth.

The fund added 260,541 shares of Aurora in the first three months of this year, bringing its holdings to 286,928 shares.

Its position in Canopy edged up by 17,400 shares, ending the period with almost 500,000 shares of the company.

The net asset value of Korea Investment Corp.’s portfolio surpassed $150 billion in 2019.

Meanwhile, one of Canada’s biggest pension managers halved its position in Canopy but added to its holdings in four other marijuana companies.

In a recent disclosure filed with the SEC, Canada’s Public Sector Pension Investment Board (PSP) slashed its position in Canopy by almost 300,000 shares compared to one year ago, bringing the total to 262,295 shares as of the end of March.

The Montreal-based fund manager reported higher positions in Cronos, Aurora, Aphria and Hexo.

Compared to the same period one year ago, PSP added:

  • 110,580 Cronos shares, bringing its total to 542,480 shares.
  • 934,215 shares of Aurora, bringing the total to 3.5 million shares.
  • 246,605 shares of Aphria, bringing the total to 553,800 shares.
  • 222,860 Hexo shares, bringing the total to 708,860 shares.

The pension fund manager sold off its 211,900 shares in CannTrust in 2019.

Ontario-based cannabis producer Canntrust filed for creditor protection earlier this month.

The Public Sector Pension Investment Board has 168 billion Canadian dollars ($130 billion) of net assets under management.

The value of PSP’s cannabis holdings declined by roughly $50 million compared to a year ago, as cannabis companies reported billions of dollars in losses in 2019.

Matt Lamers is Marijuana Business Daily’s international editor, based near Toronto. He can be reached at mattl@mjbizdaily.com.