Thanks to recent technological advances, investing has come to the masses in a big way. Small investors can purchase stocks, funds, and cryptocurrencies in ways that have been widely unavailable before, such as the ability to purchase a portion of a share of an expensive stock. The little guy can decide to take on the billion dollar funds, like the subreddit Wallstreetbets called for with purchases of GameStop, Tilray, AMC, and other stocks. Or you can learn from the big-time investors and follow their lead. Some investment apps such as Stash allow you to invest as Warren Buffet does. If you are interested in following the lead of an established fund, you may want to take note that British Columbia Investment Management (BCI) just made a big purchase of Aurora Cannabis.
BCI bought 232,058 additional shares of Aurora Cannabis to end 2020 with 290,404 shares.
Aurora Cannabis stock cratered 68% in 2020, but so far in 2021, it is up 50.2%. In contrast, the S&P 500 index, a measure of the broader market, rose 16.3% last year, and gained 4.8% so far in 2021.
Earlier this month, three Democratic senators led by Majority Leader Chuck Schumer said they would make marijuana-reform legislation a key priority, sending the sector soaring. Reddit message-board users have focused on the marijuana sector for trading, adding to the volatility. Speaking of volatility, on Friday alone Aurora Cannabis stock tumbled nearly 14% on disappointing results.
As Barron’s noted, BCI manages $135 billion in assets, and it also increased its stake in Mastercard while selling shares of Visa and Shopify last quarter, according to filings with the Securities and Exchange Commission. The Canadian investment company was established in 1999 to manage the wealth of British Columbia, with its biggest clients being 12 public sector unions, such as the the pension funds of hundreds of thousands of public sector employees that includes teachers, government staffers, and healthcare workers.
Whether Aurora ends up being one of the best cannabis stocks to own is anyone’s educated guess, but investors could probably do worse than following the lead of one of Canada’s, and the world’s, largest investment firms. Certainly one thing to follow is how BCI has a diverse group of holdings, so it’s not beholden to the swings of one particular industry. As the United States moves towards ending federal cannabis prohibition, through either piecemeal legislation or big reforms such as the MORE and the STATES Acts, we’ll likely see more big funds backing cannabis stocks, Canadian companies have gotten a head start. Hopefully, some U.S. companies will be able to compete for their fair share of the pie, but everyday that craft cannabis companies are denied banking services and are taxed at a ridiculously exorbitant rate, the wealthy multinational companies strengthen their grip on the market.