Horizon’s medical marijuana ETF gets the green light

Mar 31st, 2017 | By | Category: Equities

Canada-based Horizons ETFs has filed its final prospectus to launch the Horizons Medical Marijuana Life Sciences ETF (HMMJ), which has been granted conditional approval for listing on the Toronto Stock Exchange on 5 April 2017.

Horizons Marijuana ETF Main

The North American Medical Marijuana Index, underlying the soon-to-launch Horizons Medical Marijuana Life Sciences ETF (HMMJ), is up 146.3% over the past year.

The fund will be the first ETF to offer direct exposure to North American-listed stocks that are involved with medical marijuana bioengineering and production, through tracking the North American Medical Marijuana Index. Constituents must have a business strategy focused on the marijuana or hemp industry, and only stocks that meet minimum asset and liquidity thresholds are eligible for inclusion in the index. The index is rebalanced quarterly on a market-capitalization basis, and capped so that no single stock can exceed a weight of 10% at time of rebalance. It currently has 27 constituents.

Companies in the index may have operations that include one or more of biopharmaceuticals, medical manufacturing, distribution, bioproducts and other ancillary businesses to the marijuana industry.

“The medical marijuana industry is rapidly growing in North America as legislators allow or consider allowing more legal uses of marijuana and marijuana-related products, particularly medical marijuana usage,” said Steve Hawkins, President and Co-CEO of Horizons ETFs. “HMMJ is a way for investors to directly access the medical marijuana and life sciences industry through a transparent, low-cost ETF that holds a diversified basket of companies.”

The index is up 146.3% over the past year as an increasing number of states in the US legalize the possession and distribution of marijuana for medical purposes. Legal marijuana sales are projected to reach $20.6 billion by 2020, with a compound annual growth rate of 29%, according to Arcview Market Research, a San Francisco-based cannabis research firm.

Horizons Marijuana ETF

Source: The Marijuana Index.

“Given the recent high returns generated by medical marijuana companies, investors are clearly attracted to the industry,” said Hawkins. “We feel that the methodology of the North American Medical Marijuana Index will maximize the risk/reward opportunity for investors by ensuring the companies in the index meet important liquidity and asset requirements, so that the stocks in the index are the leaders in the Medical Marijuana industry.”

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