New York (HedgeCo.net) – The ETF industry has exploded over the last 16 years and there is a fund that focuses on just about every market in the world and one very almost every industry imaginable. The hedge fund industry is very much the same with managers looking for an edge anywhere they can get it. But did you know there was a hedge fund that focuses exclusively on the marijuana industry?

Poseidon Asset Management is a San Francisco-based hedge fund that focuses on the cannabis industry. The firm is making headlines in recent days after the elections in Canada as the new Prime Minister, Justin Trudeau, has stated that he would push for legalizing marijuana throughout the country.

If Trudeau and the Liberal parliament are able to push the legislation through, it will make it much easier for Poseidon to find investment opportunities. As it stands now, the fund has one core holding in Canada according to an article in the Canadian Press. That article stated that in the United States, Poseidon invests only in businesses that are “one step away from touching the leaf,” such as producers of cooling systems used in marijuana production facilities or vaporizer technology.

While three states have legalized the recreational use of marijuana, federal laws still prohibit it and that could present legal issues for investing directly in a business that handles the cannabis directly. As Morgan Paxhia, the hedge fund’s founding partner and chief investor stated, “We wouldn’t want to put our (investors) at risk with that exposure in the United States,” says Paxhia. “That’s why Canada is of interest to us, because we can then participate in that growth.”

Rick Pendergraft
Research Analyst
HedgeCoVest