E "Marijuana" ETFs: The Great Pretenders

As I see it, only one of the 8 ETFs discussed below qualifies as a true cannabis ETF. The other 7 are pretenders. Below we identify each of the ETFs and the percentage weight of the various marijuana category constituents in each and rank them according to the degree of exposure each ETF has to the pure MSO and LP categories:

1.  Global X Cannabis ETF (POTX):  Its stated objective is to invest at least 80% of its total assets in the securities of the Cannabis Index  and in American Depositary Receipts and Global Depositary Receipts based on the securities in the underlying index. To that end its components consist of:

  • Pharmaceutical Companies: 15.8%
  • Ancillary Goods & Services: 12.2%
  • Pure Marijuana Companies: 72.0%

2. Horizons Marijuana Life Sciences Index ETF (HMMJ): Its stated objective is to provide exposure to the performance of a basket of North American publicly listed life sciences companies with significant business activities in the marijuana industry. To that end its components consist of:

    • Ancillary Goods & Services: 27.2%
    • Pharmaceutical Companies: 7.1%
    • Pure Marijuana Companies: 65.7%

3. The Cannabis ETF (THCX): Its stated objective is to invest at least 80% of its net assets, plus borrowings for investment purposes, in exchange-listed common stock or corresponding American Depositary Receipts of cannabis companies. To that end its components consist of:

  • Ancillary Goods & Services: 37.3%
  • Pharmaceutical Companies: 4.5%%
  • Pure Marijuana Companies: 58.4%

4. AdvisorShares Pure US Cannabis ETF (MSOS): Its stated objective is to invest at least 80% of its net assets in securities of Multi-State Operator companies that derive at least 50% of their net revenue from the marijuana and hemp business in the United States and in derivatives that have economic characteristics similar to such securities. To that end its components consist of:

  • Derivatives/Swaps: 41.2%
  • Ancillary Goods & Services: 13.2%
  • Pure Marijuana Companies: 45.6%
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Wendell Brown 1 month ago Member's comment

It doesn't seem to me that these ETF fund managers are misleading anyone, you just seem to think ETFs should be all pure-play or nothing.