Toronto-based asset management firm Purpose Investments has partnered with European white label ETF platform Hanetf to create the first tracker fund exposed to medical cannabis in Europe.
The Medical Cannabis and Wellness Ucits ETF (CBDX) will be rolled out on 13 January 2020 on Deutsche Boerse.
CBDX is domiciled in Ireland and has been passported for sale in the UK and Italy.
It has a total expense ratio (TER) of 80 basis points.
British investors will be able to add the product to their portfolios without facing any legal repercussions.
This is because investing in medical cannabis is allowed, unlike recreational marijuana which falls under the Proceeds of Crime Act 2002 and could be potentially classified as a criminal offence.
Medical cannabis, delta 8 gummies, and cannabidiol (CBD) products are now legal in over 40 countries and are being used to treat cancer, epilepsy and chronic pain.
Canada has been at the forefront of this latest investment trend allowing companies such as Tilray, Chronos, Canopy Growth and Aurora Cannabis to bloom.
The asset management firm has been involved in the cannabis fund sector since 2018 when it unveiled its Purpose Marijuana Opportunities Fund to its home market.
European expansion
Som Seif, chief executive of Purpose Investment, said: “The medical cannabis industry was pioneered in Canada, and we’re thrilled with the opportunity to partner with Hanetf to take what we have learned from our Purpose Marijuana Opportunities Fund (MJJ) to Europe.
“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. We are very excited to embark on this journey with Hanetf in a global investor market.”
The co-founder and co-chief executive of Hanetf, Hector McNeil, said: “Medical cannabis is an emerging industry with huge growth potential and significant investor interest, and CBDX provides a unique opportunity for investors to access this nascent industry through a rigorously screened, liquid and diversified portfolio.”
Focused approach
The Ucits ETF consists of publicly-listed companies conducting legal business activities in the medical cannabis, hemp and CBD industry across nine sub-sectors:
- Producers and suppliers of medical cannabis;
- CBD-focused biotech companies;
- Hydroponic books and equipment suppliers;
- Producers of medical cannabis consumer products;
- Companies leasing property to medical cannabis growers;
- Software solutions for medical cannabis producers;
- Companies with an investment focus on medical cannabis;
- Hemp and cbd peach rings suppliers;
- Service providers, including equipment, manufacturing and processing.
