Cannabis Investing: High on Possibilities, Low on Racial Justice

I couldn’t resist a little puff of a joke in the title of this post because we are talking cannabis today! Specifically – investing in cannabis as a market, where you’ll see more punny names as we go along.

As always, this isn’t an instruction to invest or an exhaustive list of your options – think of it as an introduction to educate you, if you’re considering rolling cannabis investing into your portfolio. (I can’t stop). 

Read on to learn:

  • The cannabis market’s short timeline
  • Why isn’t cannabis in most ESG or Socially Responsible index funds?
  • Some cannabis stocks and funds
  • Ethical and social responsibility considerations, and how to address them


Unlike other markets which have been around for decades (tech, renewables) to centuries (banking, medical), broad regulation and legalization of cannabis sales is new. 

In the US, it was only 2018 where federal regulations changed, and it’s taken a few years for companies to get funded and grow to the point where they can sell shares on the stock market. While the stock market isn’t the only place to invest in companies, it’s the most common and the one most people and large funds utilize. So, it’s only VERY recently that “weed stocks” have even been available for investing in. If you’re interested in this timeline, listen to this podcast featuring Medicus Fund [“Seeking New Highs”] and other portfolio managers talking about their 2019 and 2020 entries into cannabis investing.

This alone should give you pause, as an individual investor. What the cannabis market looks like today will likely be very different in a decade as new companies enter and the overall funding and legalization landscape gets defined. There’s potential for upside (that means “making money”) as well as a LOT of risk: plenty of companies won’t make it, but a few will probably stack hella bags. 


One might think that funds with a focus on sustainability and social impact might embrace an industry based around a renewable and versatile crop with many healthcare uses, but no. The “vice” factor of revenue from recreational pot smoking leads cannabis companies to get excluded by the criteria which make up many algorithmically generated “social impact” funds, in particular, the many fund that use the exclusion criteria generated by Sustainalytics, which “categorizes cannabis companies the same as tobacco ones, because they don’t differentiate revenue from recreational use and medicinal use – which makes them ineligible for inclusion in their ESG fund criteria.”

This is not a global rule, but for now you will likely have to do some digging, or make a specific Cannabis ETF or stock investments to get in on the cannabis market. A few of these options are below, but as always: read the fine print, and invest at your own risk!

Finally, a group called Regennabis is working to align companies in the cannabis space with the UNs 17 Regenerative Principles, in order to 1) do some good 2) elevate the natural association of regenerative principles with hemp/CBD/bud usage, and of course 3) get these companies ESG qualified thereby enabling even more funding opportunity.


Besides the ETF “vice” criteria exclusion, there’s a blazing social inequity issue underlying the overall legalization and financialization of cannabis, especially the sale of recreational marijuana, which is: Lots of Black and brown people got their lives ruined by criminalization, policing, and incarceration from weed sales — but now capitalized white business owners are about to get rich on the same activity? Where’s the reparations?

“The cannabis industry is uniquely connected to [social, environmental, and corporate governance (ESG)] issues because of the historical criminalization and propaganda-driven stigma surrounding the plant, which has disproportionately affected underprivileged populations,” says Robert Hoban in Forbes. Which is a nice way of saying it. 

So far, this injustice is politically addressed at the individual level of cities like Oakland reserving a specific number of licences to sell recreational marijuana for people from historically criminalized communities — but of course, to use the license, you need business startup capital … which means having access to wealth … which is 10x held by white people. Or, you could borrow start-up capital … which goes 96% to white people. Private, accredited investors absolutely understand this, and some are seeking to move the dial on their own or in investor groups.

In the US, the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act which passed the House in December, is designed to help roll back some of these inequities. It would federally decriminalise, enable expungement of criminal records AND qualify cannabis businesses for SBA loans.

What to do

Tell your Senator to back the MORE Act, and for now, get your bud and your CBD from a Black-owned enterprise. Luckily, if you want to find Black-owned cannabis companies, a group called Cannaclusive has created a great database with over 800 companies: 

Use that to discover who to buy from, or to explore community investing. That’s where you, the everyday person, can invest in a small way, as in a few grand, with a local business. (ps. Learn a TON about community investing and recent experiments with it here, in this whitepaper by the National Coalition for Community Capital and The Solidago Foundation.)


If you’re Canadian, the Bank of Montreal recently launched a new suite of ESG ETFs based on MSCI indices, including a Canada ESG leaders fund that includes three cannabis stocks. 

POTX, holds 80% Canadian companies with the rest across the US, UK, and Australia has a .5% expense ratio (the annual charge for having the fund), so it’s fees are not bad.

YOLO, with 60% of it’s holdings in the US has an expense ratio of .75%, a bit high [and not in the fun way]

MSOS – is an all-US cannabis companies fund, also with an expense ratio of .75%, a bit high [and not in the fun way], but focused on the growing and expanding US market.

If you’re more interested in rolling the dice and investing in individual stocks – more risk, more possible reward – the good researchers at Motley Fool have a 4/20 cannabis stock recommendation post you’ll want to check out.

Finally, the good people of Cannaclusive again created the data YOU want, here in the form of a spreadsheet listing out companies and indicating if they’re POC owned, what they have to say about racial inequality in the industry, and if they have stock on the market or are privately owned. BOOM. My brief search for BIPOC-owned publicly traded companies lead me to Pure Sun Farms [ticker: VFF in US and Canada], which was acquired by [white-owned] Village Farms in September 2020.