Medical marijuana ETF to trade on TSX

Investors will soon be able to buy an exchange-traded fund that offers them exposure to companies with activities in the medical marijuana industry.

Horizons ETF Management (Canada) Inc. has filed its final prospectus for what is says is the first exchange-traded fund to offer direct exposure to North American-listed stocks involved in medical marijuana bioengineering and production. The fund is to begin trading on the Toronto Stock Exchange on April 5.

The Horizons medical marijuana life sciences fund will seek to replicate the performance of the North American medical marijuana index, which provides exposure to publicly traded companies involved in medical marijuana bioengineering and production.

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“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-chief executive officer. The new fund, he added, “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 North American medical marijuana index includes equity securities of publicly listed life sciences companies and firms with business activities in the marijuana industry. The companies’ exposure to marijuana may be through biopharmaceuticals, medical manufacturing, distribution or other ancillary activities in the marijuana industry.

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“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.”

The federal government has recently signalled it intends to introduce legislation by April 20, 2017, to make marijuana legal by July 1, 2018.