Cannabis: From Exile to Essential | ETF Trends

The cannabis industry is just beginning to germinate. Deemed an “essential business” in many U.S. states and Canadian provinces during the COVID-19 pandemic, the space has seen an uptick in investor interest over the past several weeks.

In the upcoming webcast, Cannabis: From Exile to Essential, Vivien Azer, Managing Director, Senior Analyst: Cannabis, Beverages, & Tobacco, Cowen & Co; Matt Markiewicz, Managing Director, The Cannabis ETF (THCX), will delve into recent developments in the industry and introduce a pure-play solution for diversified exposure to the global cannabis market.

Specifically, the passively managed The Cannabis ETF (NYSEARCA: THCX) invests at least 80% of its assets in securities of companies that derive 50% or more of their revenue from the cannabis and hemp ecosystem.

The cannabis ETF’s qualifiers are that member firms must be producers of cannabis or hemp plants, provide support, including agriculture or real estate services, or be involved in the ancillary cannabis industry, including consumption devices, technology, finance or media. Additionally, components within the CNBS portfolio must be federally legal in the countries they operate.

“Supported by favorable regulatory trends, increasing use cases and growing public acceptance, cannabis is one of the fastest-growing current investment themes,” according to Innovation Shares.

The global cannabis market is expected to grow to $630 billion by 2040, compared to $12 billion today. The cannabis industry is expected to expand into a $22 billion hemp-derived CBD product market in 2022, up from $591 million in 2018. Looking ahead, Canada’s cannabis industry is projected to grow six-fold in market value by 2026, up from $1.6 billion in 2018.

Meanwhile, the U.S. acceptance of legal cannabis is on the rise. Public support for legalizing marijuana stood at 62%, compared to 54% in 2014 and 33% in 2004.

The creators of THCX hoped to make investing in cannabis easier by helping investors get exposure to a basket of stocks that are expected to benefit from the growth of the hemp and legal marijuana industries.

Financial advisors who are interested in learning more about the cannabis industry can register for the Monday, April 20, webcast here.