A ‘New’ Marijuana ETF Is On The Way


icon  22 Nov, 2017  /  icon  0        Author: Chloe

There is no doubt that the weed wave has been hitting the U.S.A hard over the years. This is thanks to the first legalization of medical weed in California. Over the years, people have always wanted more and would often resolve to get it through the black market. This has led to many more states legalizing marijuana for recreational use. It is easy to note that Washington and Colorado states were the first to do it back in 2012.

The idea of legalizing weed for recreational use has seen more people willing to invest in it. It is often due to the huge market untapped and the potential profits from the business. It is estimated that by 2020, the weed industry will be racking in $20 billion annually. That is quite a lot of money for any economy around the world. That being said, some of the investors have been missing on the action because there was no ETF.

Well, EFT is not a new concept in the US market, but the fund had not been set up properly in the market to attract more investors. You might have heard about the ETF existing in Canada for weed . As much as it exists, it is not good for Americans, as it only applies to the Toronto Stock Exchange. It is famously known as the Horizons weed Life Sciences ETF (HMMJ).  Things are about to change for the better in the U.S as the ETFMG Alternative Agroscience ETF is supposed to begin trading anytime from December.

Just to help you understand how good the ETF will be for traders, consider the performance of HMMJ EFT in Toronto. Since its launch in April, the fund is up by 44% and still going strong. It has also built an impressive $216 million in terms of assets. This shows that if the ETF is favorable, it is bound to make a lot of money from the marijuana industry.

Some might be thinking this will be a new fund. That is not entirely the case as the Alternative Agroscience EFT is designed to complete an existing fun with similar objectives. The idea is to make it lucrative so that we can have more investors getting on the marijuana trend. It is also the reason you might have noticed the title has quotes around the word new. The fund is going to benefit anyone looking to invest in the weed business boosting the cultivators and distributors of the product.

The fund has to target the legal businesses only. There are strict measures a company has to follow before being licensed to work on marijuana. The work of the ETF is to help track the performance of the Alternative Agroscience Index. The index contains the different types of companies that are involved in handling the weed product. This includes cultivating, production, and distribution of cannabis. The index also covers the pharmaceutical companies involved in the manufacturing and marketing of the weed-related drugs. The businesses that are involved in making fertilizers and pesticides used in cultivating of cannabis are also added to the index.

As you can see, the Alternative Agroscience Index is involved from the start of growing marijuana to the time it is sold in dispensaries to the patients. This should provide better accountability of just how much of the cannabis is produced and sold. Any investor would love to see that proper accountability is done.

Many analysts agree that the potential for having a marijuana ETF is quite huge. This is based on the number of states that have already legalized the use of marijuana. Currently, there are 29 states and D.C that have legalized the use of medical marijuana. Things have taken a new twist with 8 states having now legalized recreational marijuana. More states are expected to follow the trend soon. They all know the potential of having legalized marijuana thanks to the insane tax revenues the states are receiving annually. A state like California on average makes $50 million tax revenue from cannabis sales. The amount is expected to rise with the legalization of marijuana in more states.

The use of marijuana is here to stay and make money for both cultivators and sellers. There is no point of stopping it now. This is evident due to the introduction of the ETF. We can all wait and see what happens once the ETF is implemented officially come December.

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