HMMJ.TO: Is This Cannabis ETF Still Worth Investing In?
- Jay Mitch
- Apr 12
- 4 min read
The cannabis industry has seen explosive growth, regulatory challenges, and market volatility in recent years. For investors looking to gain exposure to this space, exchange-traded funds (ETFs) like HMMJ.TO (Horizons Marijuana Life Sciences Index ETF) offer a way to invest in multiple cannabis-related companies at once. But is this ETF a good investment in 2025? Let’s dive deep into HMMJ.TO, its potential, and whether it deserves a spot in your portfolio.
What is HMMJ.TO?
HMMJ.TO is a passively managed ETF that tracks the North American Marijuana Index, which consists of publicly traded companies involved in the cannabis industry. These include cultivators, biotechnology firms, distributors, and pharmaceutical companies developing cannabis-based treatments.
Key Holdings in HMMJ.TO
The ETF includes companies such as:
By investing in HMMJ.TO, you gain exposure to the entire cannabis industry without having to pick individual stocks. But how has this ETF performed, and is it a smart investment?
The Cannabis Industry Landscape in 2025
The cannabis industry has evolved significantly since Canada legalized recreational marijuana in 2018. However, cannabis stocks have been on a rollercoaster ride due to regulatory hurdles, oversupply issues, and changing consumer demand. Here’s a look at where the industry stands today:
Growth Factors
U.S. Legalization Progress – With several U.S. states pushing for legalization and potential federal reform, cannabis stocks could see renewed interest.
Global Expansion – Countries like Germany, Mexico, and Thailand have introduced cannabis-friendly policies, opening new markets.
Medical Cannabis Demand – More research and acceptance of cannabis for medical use could boost industry revenues.
Challenges & Risks
Regulatory Uncertainty – Cannabis remains illegal at the federal level in the U.S., restricting banking access for companies.
Market Saturation – Canada has experienced an oversupply issue, causing prices to decline.
Stock Volatility – Many cannabis stocks have struggled, with some reporting significant losses due to high operating costs.
Pros & Cons of Investing in HMMJ.TO
Pros
✅ Diversification – Instead of betting on one cannabis stock, you get exposure to multiple companies.
✅ Easier than Stock Picking – If you don’t have the time to research individual cannabis stocks, this ETF does the work for you.
✅ Growth Potential – As cannabis laws evolve and markets expand, the industry still holds long-term potential.
Cons
❌ High Volatility – Cannabis stocks, including those in HMMJ.TO, are highly speculative and subject to sudden price swings.
❌ Poor Past Performance – The ETF has declined from its all-time highs, raising concerns about its long-term profitability.
❌ Regulatory Risk – Any legal setbacks or policy changes can heavily impact the cannabis sector.
HMMJ.TO’s Performance Over Time
HMMJ.TO launched in 2017 and quickly gained traction when cannabis stocks were booming. However, since the Canadian cannabis market faced growing pains, its performance has been less impressive. Here’s a quick breakdown:
2017-2018: Huge gains due to legalization hype.
2019-2021: Decline due to market oversaturation and financial struggles of key companies.
2022-2024: Some stabilization, but still far from previous highs.
Investors should evaluate whether the recent trends indicate a rebound or if this ETF is still a risky bet.
Should You Invest in HMMJ.TO?
HMMJ.TO could be a good investment if:
You have a high-risk tolerance and are comfortable with volatility.
You believe in the long-term potential of the cannabis industry.
You want to diversify your portfolio with exposure to cannabis stocks.
However, it may not be suitable for:
Conservative investors looking for steady, reliable returns.
Those who prefer strong dividend-paying ETFs.
Investors who are unsure about regulatory risks in the cannabis sector.
Alternative Investment Options
If you’re interested in cannabis investing but unsure about HMMJ.TO, consider:
U.S.-focused cannabis ETFs (e.g., MSOS – AdvisorShares Pure US Cannabis ETF).
Investing in individual cannabis stocks that have strong fundamentals.
Ancillary businesses (companies that support the cannabis industry without handling the product, such as hydroponics, packaging, and software firms).
How to Invest in HMMJ.TO
If you're ready to start investing in ETFs like HMMJ.TO, consider using Wealthsimple, a beginner-friendly platform that makes stock and ETF investing easy. Sign up using my referral link to get started: Wealthsimple Referral Link.
With Wealthsimple, you can buy and sell HMMJ.TO commission-free, automate your investments, and even explore other cannabis-related stocks.
Final Thoughts: Is HMMJ.TO a Buy?
HMMJ.TO remains one of the easiest ways for investors to gain exposure to the cannabis
sector. While it has faced major declines, legalization efforts and new markets could provide a turnaround. However, due to its high-risk nature, it’s important to assess your investment strategy before jumping in.
Would you invest in cannabis ETFs in 2025? Let’s discuss in the comments!
Who Should Read This Article?
This article is designed for:
✅ Stock Market Investors – Those looking to diversify their portfolios with sector-based ETFs.
✅ Cannabis Enthusiasts – Business owners and consumers who want to invest in the products they use.
✅ Passive Income Seekers – Investors exploring high-risk, high-reward opportunities.
✅ Speculative Traders – Those willing to take bets on volatile sectors.
✅ Canadian Investors – Local investors looking for opportunities in a homegrown ETF.
✅ Market Trend Followers – People interested in understanding how policy and regulation impact cannabis stocks.
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