Horizons Marijuana Life Sciences Index ETF (TSX:HMMJu) is the world’s first Marijuana ETF. An exchange-traded fund (ETF) can be described as a basket of investments that focus on a particular asset. In the case of HMMJ, that asset is Marijuana. ETFs are traded daily at market-determined prices that are different from the market prices of the assets. They are easier to trade than single investments, have lower fees, and allow an individual or corporation to invest in multiple securities at once.
Marijuana-related companies are fairly new players in the stock market, but they are operating within an industry that shows tremendous growth potential. The Cannabis market size is expected to reach $38.2 Billion by 2028, with a compound annual growth rate (CAGR) of 16.6% from 2022 to 2028, according to the North America Legal Cannabis Market Report 2022. The report also showed that the CBD segment of that market accounted for the highest share of revenues due to the increasing adoption of CBD for medical purposes.
The Horizons Marijuana Life Sciences Index ETF aims to replicate the performance of the North American Marijuana Index net of expenses, which provides exposure to the performance of a basket of North American publicly listed life science companies, conducting business in the Marijuana industries. Investors can reduce the risks of single Marijuana securities with exposure to a diversified group of companies within HMMJ.
HMMJ’s investments strategy allows investments into Marijuana companies that earn revenue from the medical and/or recreational use of Cannabis where it has been legalized by state law. In October 2018, recreational marijuana was legalized in Canada, permitting HMMJ to invest in index constituent issuers that serve that market in Canada. HMMJ is rebalanced quarterly, which ensures that the composition of investments accurately reflects the industry growth of the market.
- Inception Date: 4/5/2017
- Exchange: Toronto Stock Exchange
- Currency: CAD
- Previous Close: $5.18
- Volume: 46,580
- Net Assets: 227,734,527
- Consolidated Prior Day Volume: 77,976
The Horizons Marijuana Life Sciences Index ETF (HMMJ) offers serious potential upside to investors but cannot be fairly evaluated without noting the stock that far outperformed the HMMJ index: InnoCan Pharma Corp (CSE:INNO).
Innocan Pharma (INNO) was founded in 2018 and specializes in the production of CBD-integrated pharmaceuticals. Much of the company’s notoriety has come from cutting-edge breakthroughs for the future of CBD-loaded delivery systems. A B2C sales platform, distribution in seven countries, and novel technological advancements have driven rapid growth for the company.
Innocan Pharma recently expanded into veterinary medicine, which has opened opportunities for the organization to commercialize intellectual property including over 15 patents. Currently considered undervalued in share value, the Innocan Pharma stock and the HMMJ Index offer investors a unique opportunity to secure future profits.
- Market Cap: 148.66M
- Previous Close: $0.60
- EPS (ttm): -0.0211
- Volume: 20,000
- Average Volume: 33,290
- 52-week high: 1.65
- 52-week low: 0.35
As the top performing stock in the HMMJ Index, Innocan Pharma exceeded the statistics of competitive companies with a 40.48% change in the last year. Innovative Industrial Properties (NYSE:IIPR) performed second best in the index, with a -3.90% 1 year change. As a comparison, Tilray Brands (NASDAQ:TLRY) (TSX:TLRY), another popular stock, had a change of -76.13%.
As the markets for recreational Marijuana and CBD products explode in the coming years, these stocks, offer some promising opportunities to investors. For those wishing to minimize the risk of investing in one Marijuana or CBD company, HMMJ provides investment opportunities in a diversified group of companies.