The Medical Cannabis and Wellness UCITS ETF (CBDX) underwent its quarterly re-balance on 28 February, resulting in the addition of four new constituents.CBDX is the first UCITS ETF to provide exposure to the rapidly growing medical cannabis, CBD and hemp industries and was launched in January 2020 via HANetf’s unique white label UCITS ETF platform with Purpose Investments as sponsor.
CBDX tracks the rules-based Medical Cannabis and Wellness Equity Index from Solactive, that consists of publicly listed companies conducting legal business activities across nine thematic sub-sectors in the medical cannabis, hemp and CBD industries. The index methodology embeds a rigorous multi-tiered screening process to ensure that companies involved in the adult-use cannabis market are identified and removed.
The four new constituents enter the index with a combined weight of 13.6 per cent:
Akerna Corp (NASDAQ: KERN) – Vertical: Ancillary Services – A software provider offering compliance and ERP technology to the medical cannabis and CBD industry. Akerna consolidates cannabis technology companies to connect data points in the global cannabis supply chain. Creates transparent and accountable consumer packaged goods supply chain with global scale.
The Alkaline Water Company (TSX: WTER) Vertical: CBD and Wellness – Backed with investment from Hollywood’s Mark Wahlberg and P.Diddy, The Alkaline Water Co is one of the fastest-growing enhanced water brands, the company produces fruit flavoured waters infused with CBD as well as topical and ingestible CBD products. Currently the 10th largest enhanced water brand in the United States, the company has a national distribution network and is working on leveraging this network to launch their CBD infused brands.
Tetra Bio-Pharma (CVE: TBP) – Vertical: Medical Cannabis – A medical development company focussing on Cannabinoid-derived treatments to help address issues of chronic pain and ophthalmology, two of the largest addressable market segments in medical cannabis.
Grow Generation Corporation (NASDAQ: GRWG) – Vertical: Ancillary Services- The largest hydroponics equipment supplier in the US, with over 25 sales/service centers in over nine different states throughout the country. They offer a full suite of hydroponics products for new builds and ongoing grows alike.
There were no deletions from the index during this rebalance.
Greg Taylor, CIO and Portfolio Manager at Purpose Investments, says: “The medicinal cannabis industry is getting larger and moving into a more mature phase of its development. This is being reflected in the addition of companies to the index that represent a more sophisticated and diverse market for cannabis products. As the use of medical cannabis becomes more widespread in the United States and elsewhere, we expect to see this trend continue in the months and years to come.”
Ignatius Faissal, Director of Product Management at HANetf, says: “The diversity of the medical cannabis industry is highlighted by the results of this rebalance, which has seen the inclusion of companies ranging from technology suppliers to water brands. Our ongoing monitoring, coupled with regular reviews ensure all constituents comply with the index rules and that we are capturing the full eligible opportunity set for investors.”