Why recent U.S. moves bring optimism to marijuana investment market

Butt noted that the Purpose Marijuana Opportunities Fund, which is an exchange-traded fund that trades on the NEO exchange, began four years ago with a Canadian focus. But, after Canada’s troubled introduction of legalization, Purpose switched to having more U.S. exposure three years ago as it saw the potential growth opportunities in the U.S. The fund now has 85% U.S. exposure, with the rest being Canadian and international with similar progress in Germany and the U.S.

“The fund is well set to gain a lot of the upside that comes from the U.S.,” said Butt.

“There are all sorts of volatilities in the space, especially when you have that discretionary overlay, which, in this case, is a reform bill that doesn’t necessarily have a perfect metric to measure as to when it gets passed. What we do know is the setting is as green as it has been, at least compared to the last couple of years, and the market is starting to recognize that. Even if something happens on the legislative side fairly quickly, there is still a lot of room for valuations to  run because the growth of the industry is quite impressive. We’re taking a look at growth rates of 15% plus over the next five years, which is quite attractive.”

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Butt said Canadian advisors understand what’s happened in Canada and the U.S. growth potential, and those who have retained the investments are optimistic about this field’s growth.