Article by Sunny Freeman, Financial Post
Canadians will be able to invest in a basket of marijuana companies when the first marijuana exchange-traded fund launches next week, helping investors diversify their exposure to the volatile and frothy sector.
The Horizons Medical Marijuana Life Sciences ETF (TSX: HMMJ) is slated to begin trading Tuesday on the Toronto Stock Exchange. It will include 11 Canadian-listed stocks and four listed in the United States.
Exchange-Traded Funds (ETFs), which track the performance of a specific index or sector, have proliferated in recent years.
And while there are ETFs for everything from cybersecurity to construction, Horizons needed to jump over an unusual number of regulatory hurdles to add marijuana to the mix, said Steve Hawkins, president and Co-CEO of Horizons ETFs.
“There was lots of regulatory scrutiny, it’s a very controversial asset class,” he said.
“By a long shot, this was the most scrutinized fund that we’ve ever launched out of the hundred plus that we’ve done.”
However, it’s also a sector that Horizons sees as very lucrative. Hawkins said being first to market with a sector-specific fund has proven an important barometer of success.