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As part of its quarterly rebalance of ETFs, Horizons ETFs Management announced on Wednesday the inclusion of new pot stocks into its index offerings on the Canadian public market.
The manager of two cannabis-centric Canadian exchange-traded funds (ETFs) added 18 new cannabis stocks into the two indexes.
On Wednesday (September 26), Horizons ETFs Management completed a quarterly rebalance of the holdings in its two cannabis ETFs— the Horizons Marijuana Life Sciences Index ETF (TSX:HMMJ) and the Horizons Emerging Marijuana Growers Index ETF (NEO:HMJR).
The Horizons Marijuana Life Sciences Index ETF now holds close to 50 cannabis stocks, while the other index carries 38 stocks.
Cannabis ETFs offer investors a chance to gain a measured exposure into the sector through variety of companies as opposed to picking individual stocks. With the growth of the overall cannabis sector, these offerings have increased as well.
Steve Hawkins, president and CEO of Horizons ETFs, said these rebalances come at a “significant time” for the industry as legalization of recreational cannabis in Canada is scheduled for October 17.
“With recreational sales starting soon, investors will get a better idea of what companies are poised to become leaders in the recreational cannabis space and are able to generate real sales,” Hawkins said in the company’s press release.
The ETF management company has made HMMJ its premier offering while its second cannabis ETF, which launched in February, is solely focussed on smaller market cap North American companies.
“As they grow, these budding marijuana companies have the opportunity to graduate into HMMJ’s index, allowing investors to participate in the full growth cycle of these businesses through our two marijuana based ETFs,” Hawkins explained.
Here’s a list of the stocks HMJR added:
- Alefia Health (TSXV:ALEF)
- Ascent Industries (CSE:ASNT)
- Choom Holdings (CSE:CHOO)
- Chemesis International (CSE:CSI)
- James E. Wagner Cultivation (TSXV:JWCA)
- Khiron Life Sciences (TSXV:KHRN)
- Maple Leaf Green World (AQN:MGW)
- 48North Cannabis (TSXV:NRTH)
- Planet 13 Holdings (CSE:PLTH)
- Sunniva (CSE:SNN)
- Sproutly Canada (CSE:SPR)
- Wildflower Brands (CSE:SUN)
The rise of HMMJ is related to the growth of the holdings it has. The index’s top weighed holdings as of Tuesday (September 25) were: Aurora Cannabis (TSX:ACB), Canopy Growth (NYSE:CGC,TSX:WEED), Aphria (TSX:APH) and GW Pharmaceuticals (NASDAQ:GWPH).
The three Canadian producers have a combined market cap of over C$32 billion, while the pharmaceutical company has raised its profile after obtaining a critical approval in the US for a cannabidiol-based (CBD) medicine.
Here’s all the stocks added to the holdings of HMMJ:
- Alefia Health
- Choom Holdings
- Eve & Co. (TSXV:EVE)
- GTEC Holdings (TSXV:GTEC)
- FSD Pharma (CSE:HUGE)
- James E. Wagner Cultivation
- Namaste Technologies (TSXV:N)
- INDIVA (TSXV:NDVA)
- Tilray (NASDAQ:TLRY)
Tilray’s inclusion should add even more value to the index as the Canadian company has enjoyed a substantial rush in the public markets for the past two months.
Investor takeaway
These scheduled quarterly rebalances for the two ETFs offer investors a chance to see which companies have gained the attention from the market and a chance to gain exposure into emerging cannabis industry.
Both HMMJ and HMJR have taken the ups and downs of the cannabis sector volatility but have seen gains so far in 2018. HMMJ raised in value 16.65 percent, over a year-to-date period. As the markets closed on Wednesday’s trading session, HMMJ reached a price of C$24.35.
Since its launch, HMJR has seen an uptick in value thanks to the growth of its holdings. Despite trading on the lesser known Aequitas NEO Exchange, as of 2:30 p.m. EST on Wednesday the holds a price of C$9.27. HMJR has seen a 52-week high price of C$10.48.
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Editor’s Note: The headline of this article was changed since it incorrectly stated 17 cannabis stocks were added to the Horizons ETFs.
Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Ascent Industries, Chemisis International, James E. Wagner Cultivation, Khiron Life Sciences, Maple Leaf Green World, GTEC Holdings, FSD Pharma and INDIVA are clients of the Investing News Network. This article is not paid-for content.
