Investment firm BlackRock takes a stab at marijuana

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The company now has five funds involved in the cannabis industry

As marijuana stocks continue to impress, many conventional investment firms are jumping on the train. The latest is BlackRock, Inc., which has now entered the cannabis investment industry with a well-positioned move. The company has placed five actively managed funds in Curaleaf Holdings, the cannabis company that just struck a major deal with retail pharmacy giant CVS.

BlackRock has sent $11 million to Curaleaf, becoming an early adopter of institutional investments in the cannabis industry. While the U.S. federal government continues to outlaw the plant, investors have had a difficult time investing in cannabis companies and, conversely, cannabis companies have had a difficult time attracting investments.

Altitude Investment Management (AIM) partner John Brecker states, “Most institutional investors and banks have stayed on the sidelines for investing in cannabis businesses that touch the plant.” AIM is a cannabis venture fund based in New York.

This isn’t stopping BlackRock, though. In a filing with the Securities and Exchange Commission (SEC), the company acknowledged that it held about 1.1 million shares in Curaleaf at the end of December. Of this amount, $878 million is held by BlackRock Resources & Commodities Strategy Trust (RCST).

Putting things in perspective, Curaleaf only represents 0.6% of RCST’s net assets. However, it is still a sign that some companies are willing to be the forerunners in cannabis investments and understand where the future of the industry is heading. RCST invests in natural resource companies and commodities and has holdings in Royal Dutch Shell Plc, Nutrien Ltd., Total SA and others.