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Toronto-based Horizons ETFs Management (Canada) Inc. has filed a preliminary prospectus with Canadian federal and provincial regulators for an ETF focused on U.S.-based cannabis companies, the investment manager announced Friday.

The ETF’s proposed investment objective is to replicate the performance of the Horizons US Marijuana Companies Index, net of expenses. The index is designed to provide exposure to North American publicly listed life sciences companies with business activities in, or significant exposure to, the marijuana or hemp industries in the U.S., according to the prospectus.

The fund is expected to “invest in, and indirectly derive a portion of its revenues from, the marijuana industry in certain U.S. states that have legalized marijuana for therapeutic or adult-use, which is currently illegal under U.S. federal law.” It would also be exposed to companies involved in Canada’s recreational marijuana market.

The prospectus warns of the risks inherent in the murky legal landscape of marijuana in the United States: “As a result of the conflicting views between state legislatures and the U.S. federal government regarding marijuana, marijuana businesses in the U.S. are subject to inconsistent legislation, regulation and enforcement. Unless and until the [Controlled Substances Act] is amended with respect to marijuana (and there can be no assurance as to the timing or scope of any such potential amendments), there is a risk that U.S. federal authorities may enforce current federal law, including the CSA, which may adversely affect the current and future investments of the ETF in the U.S.”