The ETF Medical Cannabis and Wellness UCITS (CBDX) is the first exchange-traded fund for medical cannabis to be listed in Europe.
The European company, HANetf, announced that Canadian asset manager, Purpose Investments, has launched its first UCITS Exchange Traded Fund (ETF) through HANetf’s unique white-label ETF platform – The Medical Cannabis and Wellness UCITS ETF (CBDX).
CBDX will be launched the week of January 13 on Deutsche Boerse, becoming therefore the first and only European UCITS ETF to offer targeted exposure to the growing medical cannabis industry.
CBSX is domiciled in Ireland but has obtained a passport for sale in the UK and Italy.
Medical Cannabis in Europe
In fact , the Cannabis Medical & Wellness ETF provides targeted exposure to the medical cannabis industry, which has undergone massive transformation and growth over the past two years.
Medical cannabis and Cannabidiol (CBD) products that are used to treat conditions such as cancer, epilepsy and chronic pain are now legal in over 40 countries also more countries are expected to follow.
In Europe, for instance , there are now 28 countries that have some form of legislation on medical cannabis, with the United Kingdom being the world’s largest producer and exporter of medical-grade cannabis.
In 2018, the size of the global medical cannabis market was US$13.4 billion (~12.06 billion euros). Experts , predict therefore that the market is expected to reach a value of US$148 billion by 2026, with a CAGR of 26.4%.
Purpose Investments is a Canadian leader in ETFs and asset management, with more than $8 billion (CAD) in assets under management as of December 2019 across a range of ETFs and traditional funds.
Purpose Investments launched a cannabis fund in Canada in 2017, the Purpose Marijuana Opportunities Fund, also has in-depth knowledge of this exciting, high-growth industry sector.
Som Seif, CEO of Purpose Investments, commented: The medical cannabis industry has been a pioneer in Canada, so we are delighted to be able to partner with HANetf to bring what we have learned from our Marijuana Opportunities Fund (MJJ) to Europe.
We believe that the cannabis industry is still in the early stages of a multi-year growth phase and that there are many opportunities for innovation and new discoveries. We are very excited to embark on this journey with HANetf into a global investor market.
The CBDX ETF, which tracks the stock index on medical cannabis and wellness provided by Solactive, is in fact composed of publicly traded companies with legal trading activities in the medical cannabis, hemp and CBD industry in 9 thematic sub-sectors:
- Producers and suppliers of medical cannabis
- Biotechnology companies focused on CBD
- Hydroponics and equipment suppliers
- Producers of medical cannabis consumer products
- Companies that lease goods to medical cannabis growers
- Software solutions for medical cannabis growers
- Companies that invest in medical cannabis
- Suppliers of hemp and consumer goods to the CBD
- Service providers, including equipment, manufacturing, and processing.
The constituents go through a thorough legal and due diligence process and include only shares listed on major stock exchanges such as the NYSE, Nasdaq, TSX, and TSX-V.
TER of 80 bps
Hector McNeil, co-founder, and co-CEO of HANetf, said. Medical cannabis is indeed an emerging industry with enormous growth potential and strong investor interest. So the CBDX offers a unique opportunity for investors to access this emerging industry. Through a carefully selected, liquid and diversified portfolio.
Until now, European investors have had limited access to the cannabis market. With the launch of this truly innovative ETF, so there is now a product for investors who want to gain exposure to the cannabis industry through a basket of pre-selected Cannabis stocks in a regulated mutual fund ETF.
Because of the operational and legal due diligence that has gone into developing this truly innovative ETF. Investors can easily access an investment vehicle that can significantly reduce their legal risk compared to investing directly in individual cannabis stocks.
It is also an excellent way to diversify. Since investors do not need to research each stock. The ETF can help withstand the short-term volatility of each stock, which can allow for a longer-term, lower-risk investment.