Two new exchange traded funds (ETFs) have had formal preliminary prospectus’ issued in an attempt to meet investor demand relating to smaller marijuana growers in both Canada and the U.S.
Horizons ETF Management Canada Inc. has filed to launch a new Junior Marijuana Growers Index ETF, a fund which plans to invest in companies across North America with junior growing operations.
The fund will attempt to fill the void currently seen in its very successful Horizons Medical Marijuana Life Sciences ETF (TSX:HMMJ) which currently only invests in Canadian cannabis firms and other secondary and tertiary businesses which may profit from “growth” in the marijuana sector overall such as cannabis-related pharmaceutical firms and soil/fertilizer companies.
In addition to Horizons’ newly proposed ETF, another firm, Evolve Funds Group Inc., has released its preliminary prospectus for an ETF aimed at actively trading cannabis firms.
This ETF would be the first actively managed ETF in the marijuana space, providing investors who are interested in benefiting from long-term growth trends in addition to technical movements in the marijuana sector with a way of doing so. This ETF is expected to be launched under the ticker symbol SEED.
The increase in global demand for cannabis-related companies should provide a boon to these ETFs, despite valuation multiples which are approaching astronomical levels. As a cautious long-term investor, I would suggest treading lightly with these ETFs.
For investors looking for a small amount of exposure to this sector, however, these two ETFs provide interesting value propositions.
Invest wisely, my friends.
