Horizons ETFs Canada has launched the first passive ETF worldwide to provide targeted exposure to the US marijuana industry.
The fund is the first passive ETF to focus on the US cannabis industry.
The Horizons US Marijuana Index ETF has listed on NEO Exchange and is offered with a management fee of 0.85%.
The fund is linked to the US Marijuana Companies Index which is calculated and maintained by Solactive.
The index consists of publicly traded North American life sciences companies with significant business activities in, or significant exposure to, the US marijuana industry.
Eligible companies are drawn from across the market cap spectrum with a minimum size of CAD$75 million. Average daily trading value of constituents over the past month must be at least CAD$75,000.
The index includes producers, developers, and suppliers of cannabis-based products. Companies that offer hydroponics supplies, biotechnology companies that are engaged in research and development of cannabinoids, and companies mainly engaged in leasing property to cannabis growers will all be excluded.
Constituents are weighted by market capitalization subject to a 10% cap per stock. Reconstitution and rebalancing occur quarterly.
Steve Hawkins, President and CEO of Horizons ETFs, commented, “Horizons ETFs is uniquely advantaged to offer exposure to the US cannabis industry for several reasons.
“US federal restrictions are compelling many US cannabis producers and cultivators to seek financing through Canadian exchanges. As a Canadian ETF provider, we are able to provide access to a diversified basket of these companies, denominated in both Canadian and US dollars.
“Most importantly, as the global market leader in Cannabis funds, we have the experience and expertise to deliver sought-after passive exposure to this early-stage and complex sector.”
The fund is available to trade in Canadian dollars or US dollars under the tickers HMUS CN and HMUS.U CN respectively.
Horizons has been a trailblazer in the marijuana investing space, being the first ETF provider to launch a marijuana-focused ETF – the Horizons Marijuana Life Sciences Index ETF (HMMJ CN).
This fund is linked to the North American MOC Marijuana Index which consists of North American publicly listed companies with significant business activities in the global marijuana industry. It has CAD$1.5bn in AUM and comes with a management fee of 0.87%.
“Since its launch in April 2017 as the world’s first marijuana ETF, HMMJ has become known as the benchmark for exposure to North America’s Cannabis industry,” added Hawkins. “With the launch of HMUS, we expect that it will become the benchmark for exposure to the burgeoning U.S. Cannabis industry. That market is expected, by many leading analysts, to grow to over USD $80 billion in the coming years.”