Horizon's ETF To Launch US-based Cannabis Company ETF

Horizons ETFs Management (Canada) Inc. said that it has filed its final prospectus to launch the Horizons US Marijuana Index ETF. Units of the exchange-traded fund have been conditionally approved for listing by the NEO Exchange and are slated to begin trading on April 18, 2019, under the ticker symbols HMUS (Canadian dollar units) and HMUS.U (U.S. dollar units).

“While marijuana remains federally illegal for medical and recreational usage in the United States, the number of legal cultivators and distributors at the U.S. state level continues to grow. Many of these companies have chosen Canadian stock exchanges to list their stocks in order to raise capital to meet growing investor demand,” said Steve Hawkins, President, and CEO of Horizons ETFs. “HMUS will be the first index ETF solution to focus solely on identifying and investing directly in, U.S. marijuana and hemp companies. As the U.S. continues to further liberalize its marijuana regulations, we anticipate that more investors will be looking to invest in companies with significant business operations in the U.S. market and HMUS will provide a diversified and liquid way to gain that exposure in one ETF.”

The company said that 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. HMUS is an index  ETF, which seeks to replicate, to the extent possible, the performance of the US Marijuana Companies Index, net of expenses.

The NEO Exchange is a Canadian stock exchange based in Toronto. According to Wikipedia, it is marketed as Canada’s New Stock Exchange, NEO aims to help companies, dealers, and investors by creating a better listing experience, eliminating predatory market behaviors such as high-frequency trading and implementing a unique market making program to ensure liquidity.

Companies In The Index

The top-20 constituents and weights of the Underlying Index as of April 15, 2019, are in the table below:

CONSTITUENT NAME

TICKER

WEIGHT

CURALEAF HOLDINGS INC

CURA :CSE

12.60%

CRESCO LABS, INC

CL :CSE

11.94%

CHARLOTTE’S WEB HOLDINGS, INC

CWEB :CSE

10.96%

MEDMEN ENTERPRISES INC

MMEN :CSE

8.68%

GREEN THUMB INDUSTRIES INC

GTII :CSE

7.61%

ACREAGE HOLDINGS INC

ACRG/U :CSE

5.16%

IANTHUS CAPITAL HOLDINGS, INC

IAN :CSE

4.96%

GREEN GROWTH BRANDS INC

GGB :CSE

3.85%

TERRASCEND CORP

TER :CSE

3.76%

CANNAROYALTY CORP

OH :CSE

3.68%

HARVEST HEALTH & RECREATION INC

HARV :CSE

3.64%

FLOWER ONE HOLDINGS INC

FONE :CSE

3.32%

SLANG WORLDWIDE INC

SLNG :CSE

2.60%

CANNABIS ONE HOLDINGS INC

CBIS :CSE

1.68%

LIBERTY HEALTH SCIENCES INC

LHS :CSE

1.62%

VALENS GROWORKS CORP

VGW :CSE

1.57%

CANNABIS STRATEGIES ACQ. CORP

CSA/a: NEO

1.48%

PLANET 13 HOLDINGS INC

PLTH :CSE

1.27%

TRULIEVE CANNABIS CORP

TRUL :CSE

1.05%

SUNNIVA INC.

SNN :CSE

0.99%

Horizons said in a statement that the companies in the index are selected from Canadian and U.S. exchanges. 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.

The Underlying Index is market-capitalization-weighted, subject to a cap for each constituent issuer of a maximum of 10% of the net asset value of the Underlying Index at the time of any rebalancing. For a security to be eligible for the Underlying Index, the issuer will generally need to have a market capitalization of greater than $75 million.

“The Horizons Marijuana Life Sciences Index ETF was the first Marijuana ETF listed in the world. We launched that ETF shortly before cannabis was fully legalized in Canada,” said Mr. Hawkins. “We see a lot of similarities with the regulatory environment in the U.S. to what we saw in Canada, three years ago. If the U.S. were to enact any type of federal legalization, either medical or recreational, that would immediately make the U.S. the largest federally approved cannabis market in the world. HMUS will give investors direct diversified access to this early stage sector which has the potential of future U.S. regulatory change.”

Debra Borchardt

Debra BorchardtDebra Borchardt

Debra Borchardt is the CEO, Co-Founder, and Editor-In-Chief of GMR. She has covered the cannabis industry for several years at Forbes, Seeking Alpha and TheStreet. Prior to becoming a financial journalist, Debra was a Vice President at Bear Stearns where she held a Series 7 and Registered Investment Advisor license. Debra has a Masters degree in Business Journalism from New York University.


3 comments

  • Avatar
    Matthew Gibson

    April 18, 2019 at 10:09 am

    Hi, could you tell me how to invest in the new Horizons ETF for MJ stocks

    NEO exchange??

    I have a Janey and Ameritrade accts and neither will let me buy thru them…

    Thank you,

    Capt. Matt

    Reply

    • Debra Borchardt
      Debra Borchardt

      April 18, 2019 at 10:38 am

      the new symbol is HMUS. It just began trading today in Canada.

      Reply

  • Avatar
    Paul

    April 18, 2019 at 12:11 pm

    We are planning on cultivating Marijuana in Oklahoma, which is legal. How or what is the best way to understand the tax laws, compliance laws, etc for this project.

    Reply

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