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Irish investors to get access to cannabis fund

Canadian fund manager brings first exchange traded fund option to European market

Irish investors will next week be offered their first opportunity to invest in an exchange traded fund focused on the fast-growing legal marijuana industry. Photograph: Mladen Antonov/AFP/Getty Images

Owen Walker
Mon Jan 6 2020 - 10:39

Irish investors will next week be offered their first opportunity to invest in an exchange traded fund (ETF) focused on the fast-growing legal marijuana industry.

Canadian fund group Purpose Investments plans to launch the Medical Cannabis and Wellness ETF from Monday, January 13th, which will be Europe's first such product. The fund will be listed in Germany and made available to investors in Britain, Italy and Ireland.

Marijuana funds have proved popular in North America, despite a poor year for the sector. The world's largest cannabis ETF, the US-listed ETFMG Alternative Harvest, which has $673 million of assets according to data compiler ETFGI, lost 28.5 per cent last year. The second largest fund, the $327 million Horizons Medical Marijuana Life Sciences ETF, listed in Canada, lost 33.8 per cent.

Purpose, which manages eight billion Canadian dollars of assets in Canada including the C$34.2 million Marijuana Opportunities Fund, worked with ETF issuer HANetf on the European launch.

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The fund will charge 80 basis points – or 80 cent for every €100 invested – and will invest in public companies with legal activities in the medical cannabis, hemp and cannabidiol, or CBD, market.

Legal market

The legal market for cannabis was worth nearly $11 billion globally in 2018, and is expected to reach at least $50 billion by 2029, according to Jefferies equity research. Other research groups predict the market could be at least three times that size.

Last June, the Church of England dropped medicinal marijuana from its list of excluded investments, which followed the UK’s decision to legalise medicinal marijuana in October 2018.

“Medical cannabis is an emerging industry with huge growth potential and significant investor interest,” said Hector McNeil, co-founder and co-chief executive at HANetf. “Up until now, European investors have experienced restricted access to the cannabis market.”

He said he expected interest in the product to come from private banking, wealth management and institutional investors, which had been the main backers of North American marijuana ETFs.

Som Seif, chief executive of Purpose, added: "The cannabis sector is still in the infancy stages of a multiyear growth phase and there is ample opportunity for innovation and new discoveries." – Copyright The Financial Times Limited 2020

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