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Europe’s first medical cannabis ETF marks first anniversary


Investors are pricing in an improved outlook for the cannabis sector under a Democratic House and Presidency, and that this momentum has continued through January, with a surprise Senate takeover by the Democrats, which greatly improves the odds of cannabis reform in the US says a spokesperson for the Medical Cannabis and Wellness UCITS ETF (CBDX). 

The European listed Medical Cannabis and Wellness UCITS ETF (CBDX), which was the first cannabis ETF to launch in Europe, has just completed its first year anniversary listing on Deutsche Boerse and London Stock Exchange in January. It is also listed on the SIX Swiss Exchange. The Medical Cannabis and Wellness UCITS ETF, tracks the Medical Cannabis and Wellness Equity Index which has delivered a return of 39.47 per cent over the past three months and 40.41% over the last 12 months. Past performance is no guarantee of future performance. It has grown strongly reflecting investor demand to USD28million of assets under management. When you trade ETFs your capital is at risk.

A spokesperson for the CBDX Medical Cannabis ETF says US regulators are increasingly focusing on the potential positive impact of cannabis legislation on job creation, social inequality and tax revenues, and any reforms will provide regulatory precedence for many other countries.  Many US lawmakers, at both the Federal and State levels, are moving to relax laws around commercial cannabis usage which is helping the market to grow exponentially.

In addition to this, it says a UK initiative called Project 2021, which aims to develop the biggest database in the world on the effectiveness and tolerability of medical cannabis on patients, should be completed by the end of this year, and it expects this to be a huge boost for the industry. We see pilot projects started in France, Netherlands, and Ukraine also.   

Nawan Butt, Portfolio Manager of The Medical Cannabis and Wellness UCITS ETF, says: “We see significant tail winds carrying the cannabis industry through 2021. Momentum in the US is at full swing for legislative reform both at federal and state levels. 

“In the UK, incumbents are racing to be the first to list on the LSE, and international supply chains are gaining strength to supply the growing European market.”

Nawan Butt says: “The US cannabis trade is now running full steam ahead. With a ‘blue wave’ there is significant upside for the cannabidiol (CBD) wellness and ancillary services industries in the US, which are sharing the growth rates of the underlying cannabis industry. There is significant momentum not only at the federal level with multiple cannabis bills expected to be tabled soon but also at the state level as pandemic hit government coffers look towards taxation revenues for some relief. States such as New York, Virginia, and even Texas are debating now the advantages of cannabis legalization and its impact on job creation, social inequality, and most importantly tax revenues. 

“In the UK, within the first half of this year we expect to see multiple cannabis operators list on the London Stock Exchange. 

“Cannabis patient count in the UK is also rising at a consistent pace, and the country’s Project 2021 – an initiative that aims to create the largest body of evidence for the effectiveness and tolerability of medical cannabis by the end of this year – should hopefully make both physicians and patients more comfortable with cannabis as a mainstream rather than fringe treatment.”

Hector McNeil co-CEO at HANetf says: “CBDX was a market first for Europe. It also is a flagship ETF in HANetf’s burgeoning, innovative and broad range of thematic ETFs offering exposure to similar mega trends as medical cannabis. CBDX has had superb performance with just under 40% performance over the last 3 months and clearly great tailwinds to see that momentum going forward.”

“Before the CBDX medical cannabis ETF launched last year, European investors bought cannabis stock traded mainly in the North American markets. CBDX fixes a big problem for investors and their brokers as it can be hard for them to assess if that company is generating revenues in cannabis activities that may not be legal in Europe but are permitted in the US & Canada. CBDX screening provides comprehensive due diligence at the company level to only allow legal companies under the various European jurisdictions. It also provides diversified exposure to the space in a single trade available across European exchanges and is tradable in GBP, USD, EUR & CHF.”

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