Canadian Investors Can Light Up A New Cannabis ETF Focused On US Companies

Horizons ETFs Management (Canada) Inc., the Canadian exchange traded funds issuer behind some of that country's largest cannabis ETFs, is introducing a fund focused entirely on U.S. marijuana companies.

What To Know

The Horizons US Marijuana Index ETF is expected to begin trading on Canada's NEO Exchange on April 18 under the ticker "HMUS."

Horizons is the company behind the Horizons Marijuana Life Sciences Index ETF HMMJHMLSF, which is one of the world's largest cannabis ETFs.

“HMUS will be the first ETF in the world that is solely focused on providing exposure to companies with significant business activities in, or significant exposure to, the United States marijuana or hemp industries,” according to a statement.

The Cannabis Capital Conference returns to Toronto April 17-18!

Why It's Important

HMUS will track the US Marijuana Companies Index.

“The U.S. Marijuana Index tracks the leading cannabis stocks operating in the United States,” according to the index provider. “Constituents must have a business strategy focused on the marijuana or hemp industry, and are required to meet our minimum trading criteria.”

The index's 25 components are equally weighted and the benchmark is rebalanced on a quarterly basis. Familiar names in the index include Curaleaf Holdings CURLF, Cresco Labs CRLBF, CV Sciences Inc. CVSI and Terra Tech Corp. TRTC.

“While some securities may be listed on major North American exchanges, the majority of the securities currently trade on North American exchanges that include but are not limited to the Canadian Securities Exchange and NEO,” according to Horizons.

What's Next

The ETFMG Alternative Harvest ETF MJ is the only cannabis ETF trading on a major exchange the U.S. Home to 36 stocks, MJ has $1.21 billion in assets under management. At the end of last year, nearly 62 percent of MJ's holdings were Canadian companies compared to just over 24 allocated to U.S. cannabis firms.

Evolve Funds Group, a rival to Horizons in the Canadian cannabis ETF market, is also looking to launch a U.S.-focused marijuana ETF that would trade in Canada.

Other U.S.-based ETF issuers have filed plans to list cannabis ETFs in New York, but due to marijuana being illegal at the federal level in the U.S., there are regulatory hurdles associated with launching cannabis funds in the U.S.

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