The New Year’s rally in pot stocks has sent assets in the first marijuana exchange-traded fund back above $1 billion for the first time since Oct. 18, the day after Canada legalized recreational pot.

The Horizons Marijuana Life Sciences Index ETF (HMMJ.TO) reclaimed the $1 billion mark on Monday. Assets in the fund had dipped as low as $624 million on Dec. 21.

The Horizons Marijuana ETF, better known by its ticker HMMJ, was the first exchange-traded fund to track the cannabis industry but it’s no longer the biggest. That honor belongs to the U.S.-based ETFMG Alternative Harvest ETF (MJ.N), which surpassed US$1 billion in assets this week for the first time.

Analyst expects uptick in short sellers, activists following spotlight on corporate governance

A leading cannabis analyst said investors should expect an increase in shareholder activism in the marijuana industry after several critical reports highlighted inadequate corporate governance practices that led to management shakeups. Matt Bottomley, director of equity research with Canaccord Genuity, said at a panel discussion in Toronto there are some “justified criticisms” in the cannabis market amid recent short reports that targeted Canadian pot companies. “There’s going to be winners and losers in this space and I think short-sellers' reports could, down the road, put some spotlights on those,” he said

If there is one absolute certainty about human nature, the appeal of vice would have to be it. In all eras, in all cultures, and in all economic conditions, people persistently partake in indulgences that society is leery of. And, when barriers are placed in their way, they’ll go to great lengths to do so: the persistent popularity of dark web markets proves that much.

So-called vice industries — like beer, tobacco, and now marijuana — are among the few sectors that do not suffer major sales drops in recessions. It stands to reason that people seek an outlet for stress in bad times, so the relative lack of income elasticity in these industries makes sense.

Investors are clamoring for ways to get in on a popular, but risky, marijuana-investing craze. Despite the reality that pot is illegal under federal law, many states have legalized the substance and plenty of marijuana ETFs have cropped up as a result.

For recreational use, Oregon, Massachusetts, California and a few more states allow marijuana use. Yet, the majority of U.S. states have medical marijuana legislation in the pipeline. Presently, with the legal disconnect between federal and state law regarding marijuana use, investing directly in U.S. marijuana ETFs and stocks is risky and replete with scams and fraud.

Cannabis reform is quickly sweeping across the U.S.

Ten states and Washington, DC have now legalized marijuana for recreational use.

In addition, a total of 33 states have legalized it for medicinal use.

Now, it appears more states are jumping on the cannabis bandwagon, including West Virginia, New Mexico, Minnesota, Wyoming, South Carolina, Kentucky, and Connecticut.

However, that's just one key catalyst for the future growth of cannabis.

Canopy Growth (NYSE:CGC) formed Canopy Rivers (NASDAQOTH:CNPOF) for the sole purpose of identifying and investing in cannabis companies that could wind up working with Canopy Growth someday. To deliver on that goal, Canopy Rivers announced plans on Feb. 4 to raise $85 million from investors, including $30 million from Canopy Growth.

With optimism returning to the stock markets and a growing sense that U.S. marijuana laws are headed for an overhaul, many of Canada's largest cannabis companies have seen their share price soar since the start of the year.

The Canadian Marijuana Index, which tracks 20 large, publicly-traded cannabis firms, was trading at 723.74 at 1 p.m. ET on Monday, just about 60 per cent higher than its closing level on Dec. 31, 2018. However, that is still below a peak of 858.19 that it hit last October, days before legalization.

From October to December of last year, the index lost about half its value amid a stock market rout. As a fledgling industry, cannabis tends to see larger fluctuations in stock prices than you would see in more established industries.

Little illustrates the mania for cannabis investments better than the unprecedented demand over the stock symbol POT, but new recommendations from the World Health Organization suggest some of that frenzy may not be unwarranted.

Tiny Vancouver-based cannabis company Weekend Unlimited Inc. saw its stock gain as much as 148 per cent Friday after winning out over 40 other companies in the first-ever lottery for a stock ticker held by Canadian exchanges. Weekend Unlimited, which previously traded under YOLO, short for “you only live once,” wasn’t exactly lacking a memorable ticker.

In a weird twist, the YOLO symbol may find new life in another pot-related security, as the AdvisorShares Pure Cannabis ETF has filed to trade on the New York Stock Exchange under YOLO.

In a damning press release, Namaste Technologies (TSXV:N) (OTCQB:NXTTF) has confirmed the firing of CEO Sean Dollinger following an internal investigation into securities fraud. Namaste stock has plunged 21% on the news.

Namaste Stock

In what is considerably troublesome news for the company, Canada’s Namaste Technologies announced it has fired CEO Sean Dollinger effective immediately. 

Aurora Cannabis surged more than 9% to $8.10 a share Monday after announcing that its extraction-technology partner Radient Technologies has received its Standard Processing License from Health Canada. Shares are trading at their highest level since November 7.

Aurora says Radient's proprietary-extraction technology can achieve much higher throughputs than is possible with existing benchmark technologies. It also has the efficiency and ability to preserve the full spectrum of cannabinoids and terpenes found in the source material, the company said.