An ETF to Play as Cannabis Industry Projected to Surpass $30 Billion in 2022

It’s not secret in the capital markets that the cannabis industry is experiencing exponential growth, but if you’re still wary of its potential, maybe $30 billion by next year might convince you.

“Recent waves of medical and adult-use legalization across the United States suggest the cannabis industry is set to outpace its already impressive numbers in the months to come,” a Green Entrepreneur article said. “A new report from nationally renowned research firm Headset has offered a specific target for industry pros and politicians to expect: the Seattle-based marijuana analytics firm said in its latest forecast that sales could surpass $30 billion by the end of 2022.”

In the exchange-traded fund (ETF) world, this opens up opportunities for the Global X Cannabis ETF (POTX). POTX seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Cannabis Index.

The fund invests at least 80% of its total assets in the securities of the underlying index and in American Depositary Receipts (ADRs) and Global Depositary Receipts (GDRs) based on the securities in the underlying index. The ETF comes with an expense ratio of 0.51%.

POTX offers:

  • High Growth Potential: Globally, legal cannabis sales increased 48% from 2019 to 2020, exceeding $21bn. Forecasts suggest the market could surpass $55bn in 2026.1
  • Secular Tailwinds: Efforts to legalize cannabis are making progress in many countries, including the US. More than two-thirds of Americans live in a state where a form of legal cannabis is available.
  • Efficient Access: An evolving regulatory environment can make navigating the cannabis theme challenging. POTX delivers a basket of publicly-listed companies involved in multiple aspects of this emerging industry in a single trade.

Newly Legalized States Propelling Growth

States adopting legalization should continue to spearhead more growth for the cannabis industry. If this trend continues to persist, expect more cannabis-related companies to offer their products in these areas.

“The large influx of new states played a key part in our adjusted growth projections,” said Sami Toivola, Headset’s leading data analyst for the report.

“The report, released Friday, projected the U.S. industry will expand 27.7 percent – from $18.5 billion to $23.6 billion – by the end of this year and an additional 29.3 percent to $30.5 billion in 2022,” the Green Entrepreneur article said further.

For more news and information, visit the Thematic Investing Channel.