The Horizons Marijuana ETF (HMMJ) has added four new companies to the portfolio. They include Hempco Food & Fiber (HEMP), Lexaria Bioscience Corp. (LXX), The Green Organic Dutchman (TGOD) and Village Farms International (VFF).
“The HMMJ portfolio continues to grow as more companies achieve a size and scale that allows them to be eligible for inclusion in the North American Marijuana Index,” said Steve Hawkins, President, and Co-CEO of Horizons ETFs. “Now that we have confirmed that the official start-date of recreational marijuana legalization will commence on October 17, 2018, we expect that more companies in Canada will continue to ramp-up their marijuana-focused activities over the next quarter.”
Horizons said in its statement that rebalancing of the North American Marijuana Index, and consequently HMMJ, occurs each calendar quarter. At that point, all stocks eligible for inclusion in the index are weighted by their respective market capitalization. However, no single stock can exceed 10% of the weight of the index at the rebalance date
The Horizons Emerging Growers Index (HMJR) added several new companies to its portfolio. They include Heritage Cannabis Holdings (CANN), Supreme Cannabis (FIRE) Invictus MD Strategies (GENE), Golden Leaf Holdings (GLH), Newstrike Resources (HIP), Liberty Health Sciences (LHS), Matica Enterprises (MMJ), Friday Night Inc. (TGIF) and THC Biomed (THC).
The Index also removed some companies that no longer qualified. These included Canada House Wellness Group (CHV), Liberty Leaf Holdings (LIB), Marapharm Ventures (MDM), PUF Ventures (PUF) and Hydropothecary Corporation (HEXO).
“We would expect HMJR to have a slightly higher turnover than HMMJ, since it can hold stocks with smaller market capitalizations, but it will also be required to sell stocks that exceed a certain market capitalization,” said Mr. Hawkins. “Companies that graduate out of HMJR could potentially be in the HMMJ portfolio, so between the two ETFs, investors would have a more comprehensive exposure to the investable universe of listed marijuana securities in Canada.”
According to the company, HMJR has four key differences compared to HMMJ. HMJR invests in smaller market-capitalization companies than HMMJ and its portfolio is 100% invested in marijuana producers and distributors, and it can have exposure to companies outside of North America. In addition, HMMJ is listed on the Toronto Stock Exchange, while HMJR is listed on the NEO Exchange.