How to Invest in the First Cannabis ETF

Rachelle Gordon

April 17th, 2017

News, Top News

The legal cannabis market is booming.  According to analysts at ArcView, marijuana sales reached $6.9 billion in 2016 and are anticipated to reach nearly $50 billion within the next ten years. With this meteoric growth, investors are chomping at the bit to get in while the getting’s good; however, this is easier said than done due to the fact that cannabis remains illegal at the federal level.

For those looking to make a bit of a safer bet in the marijuana business, a new option has emerged. The first-ever medical marijuana exchange-traded fund (ETF) debuted last week on the Toronto Stock Exchange.  When purchasing shares in an ETF, investors buy shares of a portfolio that tracks the yield and return of its native index. The main difference between ETFs and other types of index funds is that ETFs don’t try to outperform their corresponding index, but simply replicate its performance.

The Horizons Medical Marijuana Life Sciences ETF (TSE: HMMJ) currently holds 14 stocks in its basket:

  • Canopy Growth Corp. (OTC:TWMJF): 9.95%
  • Scotts Miracle-Gro (NYSE:SMG): 9.95%
  • INSYS Therapeutics (NASDAQ:INSY): 9.95%
  • Aurora Cannabis: 9.95%
  • Aphria (OTC:APHQF)9.95%
  • GW Pharmaceuticals (NASDAQ:GWPH): 9.89%
  • Zynerba Pharmaceuticals (NASDAQ:ZYNE): 8.45%
  • Cronos Group: 8.02%
  • Cannimed Therapeutics: 5.56%
  • Organigram Holdings: 5.38%
  • Supreme Pharmaceuticals: 4.70%
  • Emblem Corp.: 3.79%
  • Emerald Health Therapeutics: 2.31%
  • ICC International Cannabis: 2.10%

While the introduction of the ETF is indeed exciting, it isn’t necessarily a slam-dunk for investors. Not all of the companies included are directly related to cannabis, making the 14 holdings a bit of a stretch. Only three of the firms, Canopy Growth, Aurora Cannabis, and Aphria, actually produce cannabis products. Biotech companies INSYS, Zynerba, and GW Pharmaceuticals, are focused on developing therapies based on cannabinoids.

“Several of the selections are odd,” said Alan Brochstein of 420 Investor in an interview with CNBC. “INSY, which is under heavy scrutiny from the government for its alleged marketing practices and is also restating its financials, and ZYNE are biotech companies engaged in the development of drugs derived synthetically and not from botanical cannabis. Rather than being ‘medical marijuana’ companies, their success may come at the detriment of the medical cannabis industry.”

To Buy or Not to Buy

Despite the fact that not all of the holdings in the first medical marijuana ETF are cannabis related, it’s not necessarily a bad investment. Canada is gearing up to legalize pot in July of 2018, which will certainly bode well for the majority of the companies in this ETF. Additionally, GW Pharmaceuticals’ Epidiolex met its primary endpoint in two separate phase 3 trials for two types of childhood-onset epilepsy. If approved by the FDA, Epidiolex has a shot, along with label expansion, at reaching $1 billion or more in annual peak sales by 2020.

Steve Hawkins, president and co-CEO of Toronto’s Horizons ETF states that “investing in this industry is a high-risk, high-reward proposition. While companies are maturing, the sector is at the whim of governments and it’s still unclear what rules and regulations will be placed around the sale of pot.” Due to this, many analysts believe that this EFT may be better for investors who want to put smaller amounts of money into the sector and take a “wait and see” approach.

Final Thought

Investing in the booming legal cannabis market seems like a no-brainer to many people but it’s important to tread lightly. Buying into a medical marijuana ETF offers less risk than a traditional pot stock, but the risk still remains, mainly due to the fact that cannabis remains a schedule 1 narcotic. However, industry insiders believe that it will only be a matter of time before the legal marijuana market is worth tens of billions of dollars – so right now could be the best time to get in.

To learn more about cannabis investments, sign-up for our free newsletter using the form to the right.

Rachelle Gordon

About Rachelle Gordon

Rachelle Gordon is a Minneapolis-based writer. She was the president of her college's chapter of Students for Sensible Drug Policy and worked in Amsterdam for a brief time. Find her online at

Network Partners

Follow Us on Social Media

About CFN Media

CFN Media (CannabisFN) is the leading creative agency and media network dedicated to legal cannabis. We help marijuana businesses attract investors, customers (B2B, B2C), capital, and media visibility. Private and public marijuana companies and brands in the US and Canada rely on CFN Media to grow and succeed.

CFN launched in June of 2013 to initially serve the growing universe of publicly traded marijuana companies across North America. Today, CFN Media is also the digital media choice for the emerging brands in the space.

Learn How Your Company can Be Covered on CFN Media

Learn More About the CFN Media Sponsored Content Program is not a financial advisory or advisor, investment advisor or broker-dealer and do not undertake any activities that would require such registration. The information provided on (the ‘Site’) is either original financial news or paid advertisements drafted by our in house team or provided by an affiliate., a financial news media and marketing firm enters into media buys or service agreements with the companies which are the subject to the articles posted on the Site or other editorials for advertising such companies. We are not an independent news media provider and therefore do not represent or warrant that the information posted on the Site is accurate, unbiased or complete. received fees for producing and presenting high quality and sophisticated content on along with financial and corporate news.

Disclaimer: Except for the historical information presented herein, matters discussed in this article contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. Emerging Growth LLC dba TDM Financial, which owns CannabisFN, is not registered with any financial or securities regulatory authority, and does not provide nor claims to provide investment advice or recommendations to readers of this release. Emerging Growth LLC dba TDM Financial, which owns CannabisFN, may from time to time have a position in the securities mentioned herein and will increase or decrease such positions without notice. For making specific investment decisions, readers should seek their own advice and that of their own professional advisers. Emerging Growth LLC dba TDM Financial, which owns CannabisFN, may be compensated for its Services in the form of cash-based and/or equity- based compensation in the companies it writes about, or a combination of the two. For full disclosure please visit:

Copyright © TDM Financial LLC · All Rights Reserved · Privacy Policy · Legal Disclaimer