Eyeing Canadian cannabis stocks?

If you manage your own portfolio, you’ve probably taken note of all the media attention on Canada’s popular cannabis stocks.

While the investment opportunities may be tempting, it’s important to be aware of the risks.

Norman Levine, partner with Portfolio Management Corp. in Toronto, says buying Canada’s unprofitable pot startups is akin to gambling, not investing. While federal legislation is expected to establish a recreational market, he predicts many people will exceed unenforceable grow-at-home limits, pushing up supply and pulling down prices.

“To me, there’s a lot of hype and hope, but it’s very speculative,” Levine says. “Not everybody’s going to make it. What happens when big tobacco gets involved?”

Others, however, suggest the market has big growth potential if you think about it as a long-term investment. They argue Canada is an early mover in a global movement toward pot legalization. If you’re comfortable with the risks, consider diversification. Below, find a selection of vehicles to access the market.

Emerging AgroSphere ETF: ETF Managers Group filed for this ETF. It will track an index created by BE Asset Management that follows 69 medical marijuana companies.

Horizons Medical Marijuana Life Sciences ETF: This medical marijuana ETF trades on the TSX as HMMJ.

StoneCastle New Era Cannabis Fund: StoneCastle Investment Management, which owns Canopy, Organigram, Supreme, Aphria, and Emblem, among others, expects to launch this cannabis mutual fund in May.

Private funds: Privateer Holdings has been a leader in private marijuana investment, holding its first round in 2013. It has positions in Tilray, Leafly and Marley Natural. Private investment fund Green Acre Capital also launched a cannabis fund in January 2017.