Canadian firm Horizons ETF Management has today become the second company to launch a marijuana-focused exchange-traded fund.
The Horizons Medical Marijuana Life Sciences ETF (HMMJ) debuts on the Canadian National Stock Exchange and the Nasdaq index today and is designed to track the performance of the North American Medical Marijuana index.
The launch comes hot on the heels of US firm ETF Managers Group which brought out the Emerging Agrosphere ETF, focusing on the medical marijuana and industrial hemp industries, last month.
Horizons said that the medical marijuana market posted revenues of $6.3 billion in 2016, up 30% from the previous year. HMMJ will hold a basket of stocks based in Canada (63%), the US (27%) and the UK (10%) that derive significant revenue from the industry, including medical manufacturers, distributors, bio products and biopharmaceutical firms.
The portfolio will be rebalanced quarterly and has an annual management fee of 0.75%.
At launch six stocks will comprise 60% of the ETF (Scotts Miracle-Gro Company, GW Pharmaceuticals, Canopy Growth, Insys Therapeutics, Aurora Cannabis and Aphria) underlining the fledgling nature of the 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.’