New York CNN Business —  

Cannabis stocks have been red hot on Wall Street for the past year or so — and for investors who want to take part in the action without trying to pick an individual company, there are now multiple funds that focus on the rapidly growing sector.

But are there too many options out there?

The Securities and Exchange Commission just approved the Amplfy Seymour Cannabis ETF on Monday. It will start trading Tuesday under the ticker symbol CNBS. And this ETF — which will be actively managed by cannabis investor Tim Seymour — joins three other existing ETFs that already offer exposure to the cannabis business.

There are two index-based, passive funds — the ETFMG Alternative Harvest ETF (MJ) and the aptly named Cannabis ETF (THCX), which also just launched this month — as well another relatively new actively managed fund, the AdvisorShares Pure Cannabis ETF (YOLO) (THCX).

In an interview with CNN Business before the fund’s launch, Seymour said the Amplify ETF will own some stocks that might not immediately come to mind as cannabis plays, such as Latin American cannabis company Khiron Life Sciences (KHRNF) and Canaccord Genuity (CCORF), an investment banking firm that is focusing on the cannabis sector.

“An active approach is the only way to invest in a sector like this that’s changing by the day,” Seymour said. “If you are investing in cannabis a year ago, your focus would be on different companies than now.”

Still, it’s hard to figure out at first glance what differentiates all of these ETFs from each other, particularly the two passive funds.

Cannabis ETFs all chasing the same stocks

The top five holdings in the ETFMG fund are GW Pharmaceuticals (GWPH), which has a CBD-based drug approved by the US Food and Drug Administration to treat epileptic seizures, as well as Canadian cannabis companies Cronos (CRON), Tilray (TLRY), Aurora (ACB) and Canopy Growth (CGC).

But Cronos, Aurora, GW Pharma, Tilray and Canopy are also the top five stocks in the Cannabis ETF. And Seymour said the Amplify ETF will also have stakes in Canopy, Tilray and Aurora — but not Cronos.

Still, if you look more closely, there are some key differences between the funds.

The ETFMG version, for example, also owns cigarette stocks such as Altria (MO) (which has a big stake in Cronos) as well as British American Tobacco (BTAFF), Imperial Brands (IMBBY) and Philip Morris (PM).

The Cannabis ETF, however, does not own any of the tobacco companies.

“This is a pure-play ETF for legal cannabis,” said Matt Markiewicz, managing director of Innovation Shares, which runs the Cannabis ETF. “Our view is that tobacco is a slow growth and declining industry. Cannabis is taking market share.” Seymour said the Amplify ETF won’t own tobacco stocks either.

Markiewicz added in an interview with CNN Business that his fund will rebalance its portfolio monthly, not quarterly. That will allow it to stay on top of market trends in a more timely fashion. And even though the fund is based on an index and not an active strategy, the index is also managed by Innovation Shares.

Many growth opportunities both inside and outside the US

The AdvisorShares YOLO fund looks different.

Its largest holdings are real estate firm Innovative Industrial Propertie (IIPR)s, a company that owns legal marijuana grow houses, medical and recreational pot companies Organigram (OGI), Aphria (APHA) and Hexo (HEXO) and pain management pharmaceutical maker Cara Therapeutics (CARA).

Dan Ahrens, manager of the AdvisorShares fund, told CNN Business in April that buying cannabis stocks now is like “investing in alcohol post-Prohibition.”

“There will be tons of growth,” he said, though he added that investors need to look out for bad bets: “There are going to be home runs and there will be lots of strikeouts.”

Ahrens,who launched the cannabis exchange-traded fund just before April 20 — the unofficial holiday for marijuana users — added that investors need to be wary of established companies like Canopy and Cronos, which already have scored backing from larger consumer companies. Corona owner Constellation Brands (STZ) has a large stake in Canopy.

Innovation’s Markiewicz also said the best bets right now are companies that don’t already have investments from top firms.

“You want to own the companies that are going to get bought,” Markiewicz said.

He added that he thinks the sector is still a good bet — even if the United States never winds up legalizing cannabis on a federal level as Canada and other nations have done.

“Clarification on federal regulations in the US would be a watershed moment. But this is a global story. It’s not just about the US,” Markiewicz said. “Cannabis companies are looking [for opportunities] around the world, particularly in Europe.”

So don’t be surprised to see more Wall Street firms try to cash in on the cannabis craze with even more ETFs. Cannabis clearly seems to be the investing flavor of the month.