Investors have been seeing a lot of red the past couple of days, but rising amid the Dow Jones Industrial’s 1,300-point loss in the last two trading sessions are the ETFMG Alternative Harvest ETF (NYSEArca: MJ) and cannabis stocks–Tilray (TLRY) and Canopy Growth Corporation (CGC). All three were up as of 1:15 p.m. ET–MJ rose 3.5%, TLRY up almost 8% and CGC ticked higher 2.8% as the Dow attempts to pare its losses this week.
Tilray, in particular, saw its valuation multiply almost tenfold thus far this year after a frenzy of investor interest last month skyrocketed its stock price to over $250 before selling off to its current level of $140. MJ, The first U.S.-listed ETF to target the cannabis and marijuana industry, is now up 23.58% year-to-date and 30.35% within the past year, according to Yahoo! Finance performance numbers.
In the past five days, as the Dow has been experiencing steep losses, MJ has largely been able to mute most of the negative effects within the capital markets as evidenced in the 5-day chart below:
Industry analysts like Vivien Azer of Cowen are expecting further gains as the “well-capitalized cannabis industry has been evolving rapidly” and “given the nascent stage of global cannabis, we believe that revenue growth should serve as the primary valuation methodology.”
Additionally, Azer cited four key verticals for growth: adult use, beauty and nutraceuticals, over-the-counter pain and sleep and pharmaceuticals.
“We believe that all four of these verticals represent large market opportunities,” said Azer.
Azer also added that market experts “are beginning to embrace the broad market potential for cannabis as a global, multi-dimensional category, given the talent migration to cannabis.”