An analyst recommends selling the Amplify Alternative Harvest ETF (MJ) due to its history of underperformance and recent speculative gains in the cannabis sector. The ETF is deemed unattractive for institutional investors given its concentration in underperforming U.S. MSOs and Canadian LPs, many rated Sell, and its lack of ancillary exposure, suggesting alternatives like CNBS or select individual cannabis stocks offer better risk/reward.
Seasoned cannabis industry analyst Alan Brochstein, CFA, issues a "Sell" recommendation for the Amplify Alternative Harvest ETF (MJ), citing a history of underperformance and recent gains driven primarily by speculative sector optimism. This bearish outlook, supported by a strongly negative sentiment score of -0.8 for the article, suggests significant structural concerns for the ETF. The core issue with MJ's portfolio lies in its concentration within U.S. Multi-State Operators (MSOs) and Canadian Licensed Producers (LPs), many of which currently carry "Sell" or "Strong Sell" ratings. Furthermore, the ETF's index construction and notable lack of exposure to ancillary cannabis businesses are identified as key factors rendering it unattractive for institutional investors. Brochstein suggests that alternatives such as the CNBS ETF, which holds a positive sentiment score of 0.7, or carefully selected individual cannabis stocks and ancillary plays, offer a superior risk/reward profile. This guidance implies a strategic shift away from broad, underperforming sector ETFs towards more targeted or fundamentally sound investments within the evolving cannabis market.
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strongly negative
Sentiment Score
-0.80
Ticker Sentiment
