The ETFMG Alternative Harvest ETF (MJ) was down 1.73% on Monday morning with more than half of its constituent stocks dropping. The fund dipped on news of weak earnings from Canada’s Canopy Growth Corp (WEED), which makes up 7.22% of MJ’s weight.

Canopy was down 2.31% today after fiscal Q4 earnings showed recreational sales of cannabis from the previous quarter slipped. Higher than expected costs also contributed to the losses. 

“We’re still seeing the Canopy report spill over into the sector as people work their way through the numbers,” Korey Bauer, portfolio manager of the Cannabis Growth mutual fund, told MarketWatch. “There was some disappointment about how much they’re spending and international is not as impressive as hoped, but time will tell. We have the edibles rollout in Canada coming in the (calendar) fourth quarter and Canopy is expecting that to be a big revenue provider.” 

Canopy wasn’t the only stock in MJ’s portfolio that was down. Twenty-five of the fund’s 38 constituent stocks were falling early today. 

Tilray which holds the largest weight at 8.76% is down 4.73%. HEXO, 3.27% of the fund’s weight, is down 5.27%. OrganiGram Holdings Inc, 3.96% of the fund’s weight, is down 3.63%. Corbus Pharmaceuticals Holdings Inc at 4.51% of the fund’s weight is down 3.12%. 

MJ seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the Prime Alternative Harvest Index. The index is designed to measure the performance of companies within the cannabis ecosystem benefitting from global medicinal and recreational cannabis legalization initiatives. 

It was the first U.S. ETF to target the cannabis/marijuana industry.

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