First medical cannabis driven ETF to launch in Europe

On the 01/07/20 at 7:45AM


Tuba Raqshan

Europe will soon get its first medical cannabis-themed ETF, launched by Canadian asset manager Purpose Investments and ETF platform HANetf.

The Medical Cannabis and Wellness UCITS ETF (CBSX) is the first and only European cannabis-themed ETF, offering exposure publicly listed companies engaging legally in medical cannabis and Cannabidiol (CBD) industry.

The global medical cannabis market size was $13.4bn in 2018, with growth predictions of $148bn by 2026. The listing will cover producers and suppliers of medical cannabis and related consumer products, CBD focussed biotech firms, hydroponics and equipment suppliers, hemp and CBD consumer good suppliers, service providers and other affiliated verticals.

The Ireland-domiciled CBSX will launch on 13 January on Deutsche Boerse and available for sale in the UK and Italy.

Canada-based Purpose Investments, with over CAD$8bn assets under management in December 2019, had first launched a cannabis fund in Canada in 2017, to capitalise on this growing segment. The medical cannabis industry was pioneered in Canada, pointed out Som Seif, CEO of Purpose Investments. “We believe that the cannabis sector is still in the infancy stages of a multi-year growth phase and that there is ample opportunity for innovation and new discoveries,” added Seif.

The companies in this area would go through an in-depth legal, due diligence processes, featuring primarily firms listed in major stock exchanges such as NYSE, Nasdaq and TSX. Medical cannabis industry has huge growth potential and significant investor interest, said Hector McNeil, co-Founder and co-CEO at HANetf.

He added that until now, European investors had restricted access to this market. However, the launch of this ETF – pre-screened and regulated – would offer investors an investment vehicle with reduced legal risk versus individual cannabis securities.

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