Yes, you are largely correct, these stocks are inherently risky.
And that is why I like the ETF, because instead of just one company--it is 14 different companies...this helps minimize the risk.
11 Canadian and 3 American companies.
Here are the companies which are in the ETF--(Horizons Marijuana Life Sciences Index ETF (TSX: HMMJ).
Canopy Growth Corp. (NASDAQOTH:TWMJF): 9.95%
Scotts Miracle-Gro (NYSE:SMG): 9.95%
INSYS Therapeutics (NASDAQ:INSY): 9.95%
Aurora Cannabis: 9.95%
Aphria (NASDAQOTH:APHQF): 9.95%
GW Pharmaceuticals (NASDAQ:GWPH): 9.89%
Zynerba Pharmaceuticals: 8.45%
Cronos Group: 8.02%
Cannimed Therapeutics: 5.56%
Organigram Holdings: 5.38%
Supreme Pharmaceuticals: 4.70%
Emblem Corp.: 3.79%
Emerald Health Therapeutics: 2.31%
ICC International Cannabis: 2.10%