A portfolio manager says US marijuana investment will continue, but warns that the sector may be getting ahead of itself.

In a wide-ranging conversation with the Investing News Network (INN), Nawan Butt, associate portfolio manager with Purpose Investments, said the trend of investment in US-based cannabis companies that started in late 2018 has continued well into 2019.

“Late last year we saw most cannabis investment move to the US, and that has been the target of this year’s investment thesis as well,” he told INN.

 

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Butt serves as associate manager with the Purpose Marijuana Opportunities Fund (NEO:MJJ), an actively managed exchange-traded fund (ETF) offering exposure to the cannabis space.

In February, the fund announced a 53.43 percent return since its inception in January 2018.

Butt said the Purpose Marijuana Opportunities Fund is still heavily investing in the US space, but warned investors that the market may be getting ahead of itself. This happened previously in the Canadian investment market.

In terms of Canadian investment, Butt explained that the sector has a good sense of which companies are delivering on results, but noted that the latter half of the year will give a better sense of if those companies are operating optimally.

The Canadian market awaits the introduction of edible and infused items later this year, and Butt said this new market will offer relief in terms of cannabis oversupply projections in the country. Regulations on these products from the government are expected on or before October 17.

When it comes to investment opportunities at the international stage, Butt said his fund is starting to prepare for a European rush.

“We’ve carved space in our portfolio for international exposure. We think Europe is going to be very interesting within the next two to four years,” he said. “They are not moving as quickly as we would like, but on the CBD side there has been some progression.”

For more on what Butt had to say, watch the interview above.

Don’t forget to follow us @INN_Cannabis for real-time news updates!

Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

 

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