By Kristine Owram
(Bloomberg) -- The creator of the primary marijuana exchange-traded fund is increasing its hashish roster, with plans for U.S., leveraged and inverse choices.
Horizons ETFs Administration Canada Inc., supplier of the Horizons Marijuana Life Sciences Index ETF, is “actively pursuing” the creation of a fund that can include solely U.S. licensed producers, in accordance with Chief Government Officer Steve Hawkins.
“We’ve had lots of investor inquiries saying, ‘HMMJ is nice however I would like publicity to the underlying U.S. marijuana market straight,”’ Hawkins mentioned in a telephone interview.
HMMJ, because it’s recognized, can’t maintain any companies with U.S. marijuana operations as a result of the Toronto Inventory Change prohibits the itemizing of corporations that aren’t compliant with federal regulation the place they function. This leaves it within the odd place of being unable to carry a couple of quarter of the shares in its underlying index.
The U.S. pot market is increasing quickly, with authorized spending anticipated to succeed in $22 billion by 2022, in accordance with Arcview Market Analysis and BDS Analytics. That is mirrored within the rising variety of massive U.S.-focused hashish corporations itemizing on the Canadian Securities Change, which is without doubt one of the solely exchanges that can settle for them. Seven of the 10 largest pot shares by market worth are actually centered totally on the U.S.
In a uncommon exception, HMMJ added Boulder, Colorado-based Charlotte’s Net Holdings Inc. earlier this week as a result of it offers solely in hemp-derived merchandise, which are actually authorized. Horizons has not but filed a prospectus for the U.S. marijuana ETF, which might not commerce on the TSX, Hawkins mentioned.
The agency has filed prospectuses for a leveraged ETF that goals to return double the every day efficiency of the underlying marijuana index, in addition to an inverse ETF that can return the alternative of the index utilizing derivatives. Nevertheless, it’s not planning to launch the leveraged inverse marijuana ETF that it filed for final summer season, Hawkins mentioned.
“We don’t really feel that product is true for at this time limit,” he mentioned. “Perhaps down the street when the hashish market turns into extra established and extra predictable from a qualitative perspective, then we would revisit the problem.”
HMMJ is the most important Canadian hashish ETF, with greater than C$1 billion ($750 million) in belongings. It has returned over 60 % this 12 months, making it the best-performing fairness ETF listed in Canada.
South of the border, the ETFMG Various Harvest ETF (MJ), with $1.2 billion in belongings, doesn't embrace any corporations rising or distributing marijuana within the U.S. both as a result of the drug stays unlawful on the federal stage.
To contact the reporter on this story: Kristine Owram in Toronto at [email protected] To contact the editors accountable for this story: Courtney Dentch at [email protected] Jacqueline Thorpe, Steven Frank
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